Court Opinion

ID: 6906939
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:02:00.516261+00
Date Added: 2024-06-11T16:06:23.226214
License: Public Domain

McBRIDE, C. J.
The allegations of a conspiracy among the defendants to wreck the corporation are not sustained by the evidence and need not be further considered.
1. The evidence, in regard to what, if anything, plaintiff was to be paid for his services, is conflicting, and there is no evidence that the defendant corporation in its corporate capacity ever agreed that any amount due or to become due on account of such services should be credited against his subscription for stock. There is no doubt that payment for stock subscribed may be made in property or services, if so agreed upon between the corporation and the subscriber : 1 Cook on Corporations, Chapter II, Sections 16, 17 and 18. But in the absence of such an agreement, the subscription is deemed payable in cash: Ibid., Section 17, supra.
2. There is also no doubt but that as between a solvent corporation and a subscriber, who is a creditor of the corporation, the parties may agree that the debt owing to the subscriber may be credited upon the amount due from him upon an unpaid subscription.
3. But this is as far as any of the authorities go. We have found no case, and counsel for plaintiff has cited us to none, going so far as to hold that in the absence of an agreement to that effect, and in the absence of some other equitable ground of relief, a subscriber to stock, having an unliquidated claim against a corporation for services, or otherwise, can go into equity and have the claim there liquidated and set off against the amount due on his subscription. Such a course would deprive the corporation of its right to *392have the validity of the claim tried at law with the aid of a jury, to say nothing of the embarrassments which would arise to corporations in making calls for assessments and computing in advance the amount necessary to include in the call.
If an employee stockholder can thus offset a claim for personal services against his corporation, there would be no valid reason why he might not buy up claims of others against the company and invoke the aid of equity to offset them against his subscription.
The case of Anthony v. Hillsboro Gold Min. Co., 58 Or. 258 (113 Pac. 442, 114 Pac. 95), is cited by plaintiff in favor of his contention, and, while at first glance it may so appear, a critical examination of it shows the contrary.
In the first place, there was another invulnerable ground in that case for equitable relief, and the question of the value of Anthony’s services was merely incidental to the main question. There was an attempt to sell his shares upon an assessment levied in pursuance of a void by-law, and the legality of the proceedings was the principal matter contested. Equity having jurisdiction for this purpose could finally settle all matters relating to the subscription which were in dispute between the parties.
In the second place, the court found that there was an agreement between the parties that the plaintiff Anthony should put his service against the money which the other parties to the adventure should expend in paying for the mine, and that, as the other parties had received shares of stock to the amount of the money they had contributed, Anthony was entitled also to receive stock to the value of the services rendered by him less $553.50, unlawfully drawn from the company’s treasury.
*393It will be noted that here was an agreement between the parties. Anthony, in effect, was to pay in services irrespective of their value, and against these services the other parties were to pay money. Anthony’s services constituted in effect a liquidated demand, and this, coupled with the agreement recited in the opinion, probably brought the case within the rule, as stated in Cook on Corporations, Chapter II, Sections 16,17 and 18. The writer of this opinion, who tried the case at Circuit, thought and decided differently but was reversed, and no doubt properly, by this court.
It may be proper to add that the phase of the case here discussed was not argued in the briefs of counsel, or alluded to by the court in its opinion in Anthony v. Hillsboro, etc., 58 Or. -258 (113 Pac. 442, 114 Pac. 95), the defendants relying principally upon certain estoppels pleaded in the answer as a defense against the patent irregularity in the notice of sale of the stock.
4. It is claimed that the assessment is unequal, but no inequality is shown in the pleadings, which allege in substance that each subscriber paid the first assessment of 10 per cent on the stock subscribed by him, and that no other payments had been made thereon by anybody, except in so far as the value of the services rendered by plaintiff and Fenner constituted' payments. In the testimony it appeared that at the inception of the corporation Fenner had furnished certain necessary machinery, for which he had never been paid. Fenner presented a claim for the price of the machinery, with interest, and this claim was allowed by the corporation, and by agreement he was given credit for the amount in payment of his assessment. In this, in the absence of fraud, there was nothing illegal. There is no doubt or controversy about his having furnished the machinery and nothing to indicate *394that his claim for compensation was not just. The corporation had a right to allow it and, when so allowed, to agree that the amount found due him should be credited upon the sum due upon stock subscription.
Had plaintiff presented his claim for services and succeeded in inducing the corporation to allow it or part of it and to credit it upon his stock subscription, the transaction would have been perfectly legal and regular, hut his claim has never been liquidated and no agreement to credit it upon his stock subscription has been shown, so that so far as we can see he has no remedy except to pay his subscription and bring his action at law upon his alleged claim for services, so that a jury, which is seldom illiberal when a question of wages is submitted to it, can determine what the actual agreement was in reference thereto and appraise the value of the services performed.
The decree of the Circuit Court is affirmed.
Affirmed.
Bean, Johns and Bennett, JJ., concur.