Court Opinion

ID: 5170418
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:54:06.853081+00
Date Added: 2024-06-11T08:26:03.880742
License: Public Domain

SULLIVAN, J.,
Dissenting. — I am unable to concur in the conclusion reached by the majority of the court to the effect that there was no merit in the petition for a rehearing. This court held in its original opinion in this case as follows: “Under this limitation, the corporation has no power to make an assessment until the promotion stock, as provided in the contract, is paid up to twenty-five cents per share, which was not paid in this case, and has not been paid at the time the plaintiff’s stock was assessed and sold; therefore the assessment was void.” In the original complaint, the ownership by the respondent Mantle of 75,750 shares of stock was alleged, and also that the corporation was wrongfully attempting to assess the same, thus putting directly in issue the authority of the corporation to assess not only said 66,000 shares of the treasury stock, but 9,750 shares of the common stock of said corporation. The trial court enjoined the sale of the entire 75,750 shares of stock. The amended and supplementary complaint set forth the ownership of said 75,750 shares and alleged that the same and all thereof had been sold in violation of the injunction of the court and in violation of the rights of the owner, and the complaint alleged that none of said stock was liable for assessment until the promoters had paid up to 25 cents per share on the million dollars’ worth of stock issued to them. The trial court found that the promotion contract was a valid contract and binding on the cor*641poration, and that the defendant corporation had never made any effort to collect from the promoters the unpaid balance due under the promotion contract, and that they had paid nothing except 9% cents per share, making a total of $95,000 out of $250,000 that they were required to pay under said contract.
The court also found that a large number of the promoters were solvent and the balance due on their subscription could be collected' by the corporation. By Finding No. 23 the trial court found that some of the directors of the corporation threatened to levy an assessment upon all of the stock of the corporation, and thereupon the respondent Mantle served upon the directors a notice requiring them, as directors, to proceed and collect from the promoters of the corporation and the subscribers of the million shares of stock the balance due on said promoters’ contract, and protested against the levying of any assessment on the general stock of the corporation until the promoters had complied with that agreement.
The trial court further found that said corporation had disregarded its duties in that regard, and pretended to levy an assessment upon all of the stock of the corporation, including said 75,750 shares owned by Mantle. The trial court issued an injunction which covered said 9,750 shares as well as the 66,000 shares, enjoining the corporation from levying an assessment on the ground that said company had not proceeded in accordance with law in making said assessment, and held in effect that no assessments could be levied upon the general stock of the corporation until the promoters’ contract had been complied with.
This court in the original opinion found that said promoters’ agreement was a valid and binding agreement and that the corporation had no power to make an assessment until the promoters had paid up to 25 cents per share on the stock issued to them, as provided by said contract, which had not been paid at the time the plaintiff’s stock was assessed and sold, and therefore said assessment was void.
As I understand the pleadings, the validity of said assessment was fairly put in issue, and the trial court found on *642such issue and it was not the intention of this court in its original opinion, nor in either of the subsequent opinions, to hold that said assessment and sale were valid as to any of the stock issued by said corporation.
The decision of the majority leaves some of the vital issues undecided. The judgment of the trial court ought to be affirmed without any modification whatever.