Court Opinion

ID: 8185410
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:07:50.10485+00
Date Added: 2024-06-11T16:40:23.862444
License: Public Domain

The following opinion was filed December 15, 1896:
Winslow, J.
Doubtless the defendants’ subscription for stock could not be varied or affected by the alleged parol *111agreement, but this was 4not really the important question in the case. The proof which was offered tended to show that after the defendants’ subscription was received the corporation went on, and sold out its entire authorized stock to others-, with the consent of the defendants, and received full pay therefor. ‘ If this was the fact, it is impossible to see how those other subscribers could now be deprived of their stock,, either by the corporation or by the defendants. If they cannot be deprived of their stock, then certainly the defendants ought not to be compelled to pay for stock which cannot be issued without making an illegal overissue of stock. It clearly seems to us that, if the facts be as alleged, then the parties have, by their acts, effectually canceled and rescinded their original contract. Perkins v. Union B. H. & E. Machine Co. 12 Allen, 273.
Different questions might arise were the controversy one between creditors of the corporation and subscribers to stock,, but in an action between the corporation itself and the subscribers the foregoing conclusion seems very clear.
By the Court — Judgment reversed, and cause remanded for a new trial.
A motion for a rehearing was denied February 2,1897..