Hooper v. Central Trust Co.

Citations

• 81 Md. 559
• 29 L.R.A. 262
• 32 A. 505
• 1895 Md. LEXIS 87

Syllabus

<p>Promoters of Corporations — Priorities Between First and Second Mortgage Bondholders — Simulated Payment for Shares of Stock— Vendor's Lien— Waiver — Receivers' Certificates — Liability of Stockholders — Cross-Bill—Bona Fide Purchaser of Bonds.</p> <p>Where the promoters of a corporation, by falsely representing to a vendor that improvements of great value will be placed upon the property and paid for, induce such vendor to convey the same to the corporation and accept in part payment second mortgage bonds, so as to let in as a first lien certain first mortgage bonds which are held by the said promoters, who also issue to themselves shares of stock in the corporation upon which they pay nothing, then the lien of such first mortgage cannot obtain priority over the second mortgage for the unpaid purchase money.</p> <p>Where the promoters of a corporation, by various devices, cause shares of stock to be issued as full paid, as if in consideration of property acquired by the corporation, when in fact the property was not paid for by the shares, and the same are assigned to the promoters, who also hold the bonds secured by a first mortgage on the estate of the corporation, then such promoters cannot recover as creditors of the corporation and first mortgage bondholders without paying the amount due by them to thé company as stockholders, if the rights of a vendor of the property to the corporation are thereby put in jeopardy.</p> <p>A vendor’s lien is not waived by a recital in the deed that the consideration has been paid ; and it prevails against the grantee and his privies in estate and against those claiming as volunteers, or even as purchasers for value, if they have notice that the purchase money remains unpaid.</p> <p>When the property of a private corporation has been placed in the hands of a receiver, all expenses for safe-keeping and preservation are properly payable out of the income, or if there be none, then out of the proceeds of the corpus of the estate