Kelly v. Central Union Fire Insurance

Citations

• 101 Kan. 91
• 165 P. 806
• 1917 Kan. LEXIS 26

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Verdict — Consistent Findings — Findings Conclusive. Rule followed that a general verdict and consistent findings of fact dispose of all controverted issues of fact when based upon substantial though conflicting testimony.</p> <p>2. Insurance Corporation — Purchasing Its Own Capital Stock — Contract. Record shows evidence sufficient'to prove the contract in controversy, and to prove its authorization and ratification.</p> <p>3. Same — Purchasing Its Own Stock — Reducing Overissue of Stock. A statute forbidding a corporation to purchase or hold its own stock, either absolutely or as collateral, after it has once been issued, does not cover the transactions of a corporation during its formative stage, and before its corporate structure is perfected, in contracting for the surrender and cancellation of subscription stock to suppress an over-issue in excess of its authorized capitalization, when such correction of the illegal overissue is done in good faith, free of any taint of fraud, and not in prejudice of the rights of third parties.</p> <p>4. Same — Ultra Vires Contract — When Enforceable. A corporation can not avoid its obligation on a plea of ultra vires when it has appropriated the consideration and received the benefits of it, and where the party seeking to enforce it has fully performed her share of the bargain.</p> <p>5. Insurance Corporation — Method of Extinguishing an Overissue of Capital Stock — Valid. Where a corporation in its formative stage discovers that it has oversold its authorized maximum capital stock, the fact that all stock sold after the maximum had been reached should have been treated as void will not bar a recovery for the agreed value or reasonable price of valid stock surrendered by a prior lawful subscribing stockholder to relieve the company’s embarrassment and to extinguish the overissue, when this method of correcting the company’s capitalization is undertaken in good faith, free of any taint of fr