Johns v. Clothes

Citations

• 78 Wash. 602
• 139 P. 755

Syllabus

<p>Corporations — Stock—Subscriptions —Payment—Trust Fund— Rights of Creditors. The stock of a corporation being a trust fund for the benefit of creditors, it is no defense to a receiver’s action on a stock subscription that the stock was subscribed under an agreement to pay less than par for stock issued as fully paid up, and1 that unpaid balances would not be called for.</p> <p>Same — Action on Subscription — Defenses. That a stock subscription was induced by representations that the stock had been wholly subscribed by responsible people, is immaterial, where it was not claimed that the subscription was void in toto, and the only issue was as to the agreed price.</p> <p>Same — Liability of Stockholders — Extent of Liability — Subscription to Surplus Fund. A stock subscription whereby the subscriber agreed to pay $50 per share over and1 above the par value, to be credited to a surplus fund, is legal and binding, both as to the corporation and creditors, where the surplus fund was intended as an additional asset upon which creditors could rely, and where all the stockholders subscribed proportionately to the fund; and Const., art. 12, § 4, and Rem. & Bal. Code, § 3698, limiting the liability of stockholders for the debts of the corporation to the unpaid balance due on the capital stock is not a limitation upon the power of the stockholder to contract with the corporation in reference to a surplus fund.</p> <p>Same — Liability of Stockholders — Actions—Defenses—Burden of Proof. The burden of establishing that creditors did not rely upon a surplus fund provided by the corporation as an additional asset, or that they were estopped to take advantage of it, is upon the stockholders who had bound themselves to provide the fund.</p> <p>Same — Stockholders—Subscriptions — Liability to Creditors— Estoppel. One who allowed a corporation to hold him out as a stockholder (under a tentative subscription or option to take stock) in order to influence others to take stock or insur