German-American State Bank v. Soap Lake Salts Remedy Co.

Citations

• 77 Wash. 332
• 137 P. 461
• 1914 Wash. LEXIS 900

Syllabus

<p>Corporations — Stock — Subscriptions — Payment in Property— Overvaluation — Liability to Creditors. Where an insolvent corporation conveyed all its assets to a clerk of one of its officers, who subscribed for all the stock of a reorganized company, transferring the assets to it in full payment of the stock, which she transferred proportionally to the stockholders of the old company, such stockholders are subscribers to the stock of the new company, and having paid but a nominal consideration for their stock, they are liable to creditors on their unpaid stock subscriptions, on the trust fund theory, requiring stock to be paid for in money or money’s worth.</p> <p>Banks and Banking — Representation—Officers—Adverse Interests — Notice. Where the president and cashier of a bank extended credit to, and permitted overdrafts by, an insolvent corporation in which they were interested as stockholders with full knowledge of its affairs, in an action on their unpaid stock subscriptions for the benefit of the bank as principal creditor, it cannot be claimed that the bank was estopped by the knowledge of its president and cashier, who were adversely interested and who had failed to give notice of conditions to any of the other trustees or officers of the bank.</p>