Handley v. Stutz

Citations

• 139 U.S. 417
• 11 S. Ct. 530
• 35 L. Ed. 227
• 1891 U.S. LEXIS 2394

Syllabus

<p>The failure to enter a vote of stockholders in. a corporation in the corporation records at the time when it was adopted does, not affect its validity.</p> <p>A resolution of stockholders in a corporation organized under the laws of Kentucky to increase the capital stock' of the corporation, passed at a meeting held without the limits of that State, is binding upon the members present and voting for it.</p> <p>An increase by a Kentucky corporation of its capital stock within the amount authorized by law is not invalidated by reason of the fact that no amendment of the charter authorizing such increase was ever recorded ; or published as required by the laws of that State.</p> <p>When a stockholder in a corporation who assents to an. increase in the capi- ■ tal stock of the corporation and its gratuitous distribution among the shareholders, receives such stock as full.paid stock, an obligation arises to pay for it in full, when called, upon to do so by creditors whose debts are subsequent to the authorization of the increase: but this equity does not exist in favor of a creditor whose debt was contracted prior to such authorization.</p> <p>An active corporation, finding its. original capital impaired by loss or misfortune, may, for the purpose of recuperating itself, and of producing new conditions for the successful prosecution of its business, issue new stock, and put' it upon the market, and sell it for the best price that can be obtainedand in such case no such trust in favor of a creditor arises against the purchaser who, in good faith, buys for less than par.</p>