Citizens' Savings & Loan Ass'n v. Belleville & S. L. R. Co.

Citations

• 117 F. 109
• 54 C.C.A. 495
• 1902 U.S. App. LEXIS 4412

Syllabus

<p>1. Corporation—Equitable Right to Stock.</p> <p>A railroad company Issued and delivered to a county a certificate for a certain number of shares of its authorized capital stock, in payment for which it received bonds of the county, which it transferred to a contractor, who constructed its road in part payment therefor. The contractor was entitled under his contract to all sums received by the company for stock sold, and to all stock remaining unsold at the time the road was completed. The bonds were payable to bearer, and were transferred for value by the contractor to complainants, or to others through whom complainants acquired them. The bonds were adjudged void, and in a subsequent suit by a stockholder of the company against the county the certificate of stock issued in exchange therefor was also declared void and canceled. Eeld, that the bonds, being void when delivered by the company to the contractor in lieu of the stock for which they had been exchanged, carried with them the right to such stock, which passed by their transfer to subsequent holders, and that complainants were entitled in equity to a decree requiring the company to issue the stock to them.</p> <p>2. Same.</p> <p>The fact that complainants were chargeable with notice, either constructive or actual, of the facts which rendered the bonds void, would not affect their right to relief against the railroad company; no question of bad faith being involved.</p> <p>8. Same—Suit to Compel Issuance—Parties.</p> <p>In a suit against the railroad company to compel the issuance of the stock to complainants, as bona fide holders of the bonds, neither the county, the original holder, nor any stockholder of the company was a necessary party.</p> <p>4. Same—Conditions Precedent—Doing Equity.</p> <p>The railroad company was not entitled in such suit to demand that complainants should be required, before being entitled to equitable relief, to bring into court, for its use, interest payments made by the county