Citizens' Bank v. Folse

Citations

• 123 La. 918
• 49 So. 641
• 1909 La. LEXIS 802

Syllabus

<p>1. Oorforations (§ 123*) — Transfer of Stock Certificates — Pledge — Construction.</p> <p>The act of transfer and power of attorney, delivered with stock certificates which are pledged to secure the payment of a note, are to be construed with reference to the entire transaction, including the recitals on the face and back of the note, and, so construed, are the ordinary incidents of the contract of pledge, and do not evidence a present sale of the stock.</p> <p>[Ed. Note. — For other cases, see Corporations, Cent. Dig. § 507; Dec. Dig. § 123 ;* Pledges, Cent. Dig. §. 4.]</p> <p>2. Corporations (§ 218*) — Stockholders— Liability for Debts.</p> <p>Where the holders of. the majority of the common stock of a small corporation execute an instrument guaranteeing the repayment of the money purporting to have been invested by one of their number in certain shares of preferred stock, issued in his name, together with dividends thereon, for the purpose of enabling him to borrow money for the use of the corporation, and the money is so borrowed, and is used by and for the corporation, the guarantors are liable to the innocent third person from whom the money was borrowed.</p> <p>[Ed. Note. — For other cases, see Corporations, Dec. Dig. § 218.*]</p> <p>(Syllabus by the Court.)</p>