Murphy v. Panton

Citations

• 96 Wash. 637
• 165 P. 1074
• 1917 Wash. LEXIS 653

Syllabus

<p>Corporations — Capital Stock — Payment— Record — Conclusiveness — Evidence—Parol Evidence. The record, in the minute book of a corporation showing the cancellation of part of the shares issued to three subscribers seven years previously, for the stated reason that such stock had not been paid for, and the purchase of the same shares by the same subscribers to be delivered to them “as soon as paid for,” is sufficiently ambiguous to admit of parol evidence to the efEect that the stock had in fact been paid for, and that the cancellation and resale was a clumsy attempt to release the right to vote the stock in the interest of a new subscriber to increased capital who was taking over the control of the company.</p> <p>Same — Stock Subscriptions — Actions by Receiver — Prejudice to Creditors. Unless it affirmatively appears that existing creditors were prejudiced by a record in the minute book indicating that stock subscriptions were unpaid, a receiver seeking to collect the subscriptions has no greater rights than the corporation.</p> <p>Same — Stock Subscriptions — Actions — Defenses — Record — Estoppel. A record in the minute book indicating that stock subscriptions were unpaid, does not estop the stockholders from showing that the stock had actually been paid for, as against creditors who could not have been prejudiced in extending a credit upon the faith of stock subscriptions which they would likewise have extended upon the faith of representations that the stock was paid up.</p> <p>Same — Capital Stock — Reduction—Cancellation of Stock — Validity — Trust Fund — Existing Creditors. Under the trust fund doctrine, the cancellation of a stock subscription agreement does not release a solvent stockholder from his liability to pay for the stock because, with the consent of all the stockholders, the contract had been “complied with to the best ability of the parties,” as against creditors of the corporation who had theretofore opened a line of credit and a course of d