Hobson v. Marsh

Citations

• 69 Wash. 326
• 124 P. 912
• 1912 Wash. LEXIS 903

Syllabus

<p>Corporations—Stock—Illegal Issue—Liability to Bona Fide Purchaser. A corporation being liable to an innocent purchaser of an illegal issue of stock, the transfer of such stock to the corporation by a bona fide purchaser, in consideration of reimbursement of the purchase price paid, in the shape of a promissory note of the company, amounts to a surrender of the stock, in settlement of the company’s liability.</p> <p>Bills and Notes—Consideration—Accommodation Indorsement. Where a bona fide purchaser of illegally issued stock surrendered the same to the corporation in consideration of the promissory note of the company, due in three months, indorsed by another, the acceptance of the note is a settlement of the cause of action against the corporation and an extension of time for payment of the debt, and is a sufficient consideration for the note as between the payee and an accommodation indorser.</p> <p>Same. In such a. case, that the illegal stock was retained as security for the payment of the debt, or that the stock certificate was void, does not affect the consideration for the note.</p>