Jorguson v. Apex Gold Mines Co.

Citations

• 74 Wash. 243
• 133 P. 465
• 1913 Wash. LEXIS 2029

Syllabus

<p>Corporations — Dividends—Payment From Capital. An agreement by a corporation, in consideration of the sale of stock, to guarantee the payment of $1,000 in dividends within eighteen months, is void, where there were no net profits, since to enforce it would contravene public policy and violate Rem. & Bal. Code, § 3697, making it unlawful to declare dividends except out of net profits or to reduce its capital stock by paying any portion of it to its stockholders.</p> <p>Same — Guaranteeing Dividends. A bond by a corporation guaranteeing dividends in a sum equal to the amount paid for the stock, makes the stock subscription a fictitious one and violates Const., art. 12, § 6, prohibiting the issue of stock except to dona fide holders for full value.</p>