Court Opinion

ID: 8190921
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:13:54.863683+00
Date Added: 2024-06-11T16:40:36.358567
License: Public Domain

Winslow, C. J.
Sec. 1173, Stats., provides in effect tbat no stock corporation shall transact business with any other than its members until at least one half of its capital stock is subscribed and at least twenty per cent, thereof paid in; and tbat if any obligations be incurred in violation of this requirement tbe signer or signers of tbe articles transacting such business or authorizing tbe same, or consenting thereto, with knowledge, shall be personally liable upon the obligations so incurred.
It is alleged by apt averments in tbe complaint here tbat neither tbe required amount of stock bad been subscribed nor the required .percentage paid in at tbe time of tbe assignment of tbe lease, and tbat tbe signers of tbe articles of incorporation (of whom tbe appellant was one) knew of and consented to tbe making of tbe assignment and the acceptance thereof by tbe corporation, as well as tbe assumption by it of the obligations imposed on the tenant by tbe lease.
*216If the acceptance of the assignment and the assumption of the obligations of the lease constituted the incurring of an obligation to the lessors, then it is quite clear that the statute was violated and that the signers of the articles became personally liable to carry out such obligation. That a valid contract made with one person for the benefit of another may be at once enforced by that other regardless of any formal assent thereto prior to the commencement of the action, is settled in this state by many decisions. Tweeddale v. Tweeddale, 116 Wis. 517, 93 N. W. 440. The law regards such a transaction as at once vesting in the third person a right to have the promise made for his benefit executed, which right cannot be changed by the immediate parties to the transaction. Thus privity is created, to all intents and purposes, between the promisor and the person for whose benefit the promise is made.
Upon the allegations of the complaint the appellant was bound to carry out the obligations of the lease just as fully as the corporation was, and hence the complaint states a good cause of action against him.
By the Court. — Order affirmed.