Court Opinion

ID: 9828352
Source: CourtListenerOpinion
Date Created: 2023-09-01 18:19:11.858349+00
Date Added: 2024-06-11T07:42:47.472916
License: Public Domain

On Motion for Rehearing.
Appellants Rowan in their motion for rehearing insist that we erred in our main opinion in holding that the agreement by which the Rowans and the Texas Orchard Development Company bound themselves to redeem the preferred stock sold to appellees at par and accrued interest at the rate of 7 per cent, per annum either in cash or in land, to be taken out of the body of land conveyed by the Rowans to the orchard company at the price of $27 per acre, was not' illegal and unenforceable. We do not care to add anything to what is said in our former opinion in support of our holding that the agreement is not void and should be enforced. Counsel for appellants argue with great force that the statement in our former opinion that the land out of which this stock is to be redeemed is no part of the capital of the corporation is unsound. It may be that if construed literally the statement is inaccurate, but our holding that the agreement is not void does not depend upon the accuracy of this statement. The agreement with appel-lees to give them land at $27 per acre for the amount invested by them in preferred stock of the corporation, with interest at 7 per cent, per annum, was made prior to the formation of the corporation, and when the land was deeded to the corporation it was charged with this contract; and, the corporation, having taken the title to the land with knowledge of the contract, and having expressly agreed to be bound thereby, cannot defeat the enforcement of the contract on the ground that it is against public policy for a corporation to redeem its stock out of its capital. It’ is true that a portion of the money received by the corporation for the preferred stock sold to appellees was paid to the Rowans as part of the purchase money of the land, and the land purchased with this money would ordinarily have become a part of the capital of the corporation, but this fact would not relieve the land of the charge which the contract had placed upon it prior to its purchase by the corporation, and to the extent of this charge the land could not, in any true sense, be regarded as capital or asset of the corporation.
Complaint is also made in the motion of our finding in the main opinion that Rowans, appellants, accepted benefits under this contract with knowledge of its terms. A further examination of the record discloses that this finding is too broad. The appellants Misses Alice, Margaret, and Jennie, Rowan, who were beneficiaries under the deed of trust by which the property was conveyed to D. Noble and Archibald H. Rowan, did receive a portion of the money paid by ap-pellees for the preferred stock, but it is not shown that at the time they received this money they knew it was a part of the money paid by appellee for the preferred stock under the agreement to redeem before men*884tioned. We are still of opinion tliat the contract' of the Rowan trustees to redeem the stock in land at the rate of $27 per acre was one which they were authorized to make under the powers conferred upon them by the trust deed.
After careful consideration, we haye reached the conclusion that the motion for rehearing should be overruled, and it has been so ordered.