Melvin v. Lamar Insurance

Citations

• 80 Ill. 446

Syllabus

<p>1. Subscription—whether a subscription or security for a loam.. Where a contract with an insurance company recites an absolute agreement “ to subscribe for and purchase 5500 shares of the capital stock ” of the company, and to pay therefor to the company |550,000 in certain installments, and provides that the subscription and purchase shall be made in ten days, and gives the subscriber the option to have the company resell or repurchase the stock within a given time, and under the agreement the subscription was made and certificate of stock issued, it was held, that this was an actual subscription, and that the shares were not taken as collateral security for a loan. The option in such case is a right secured by the contract above, and in addition to the absolute title to the stock.</p> <p>3. Same—right to cancel same as against other stoclcholdei’s. Where a subscription is made to an insurance company to a large amount, and twenty per cent paid in to enable the company to procure the Auditor’s certificate, but under a- contract giving the subscriber the right to withdraw the sum so paid in and have the subscription canceled, and other large subscriptions are afterwards made to the capital stock by parties, without actual notice of the contract, and believing the subscription to be a permanent one, it was held, that such subscription could not be canceled and the money paid thereon withdrawn, without the knowledge and consent of those subscribing on the faith of it.</p> <p>3. Same—presumption in respect to. All subscriptions are presumed to be upon the same basis, and all shares entitled to the same benefits and subject to the same burdens, and in the subscription of each person every other subscriber has a direct interest, and a right to have the same remain and contribute in future burdens.</p> <p>4. Same—agreement for withdrawal, fraudulent. A subscription to the capital stock of a corporation of a large amount, coupled with a right, under a separate contract,