Person & Riegel Co. v. Lipps

Citations

• 219 Pa. 99
• 67 A. 1081
• 1907 Pa. LEXIS 611

Syllabus

<p>Contract — Offer and acceptance — Corporations—Subscription to stock.</p> <p>Where the owner of a store building offers to lease the same to a trading corporation, and as an inducement to the company to take the lease, offers to provide a large sum of money in cash for an issue of the preferred stock of the company, and such offer is accepted by the corporation, the transaction establishes a valid contract between the parties based upon sufficient consideration, and not lacking mutuality.</p> <p>In such a case an acceptance of the offer will be implied, apart from any formal acceptance by the board of directors, where it appears that the offer was made to the director and general manager of the company by whom it was communicated to several directors, that subsequently in pursuance of the offer the board summoned a stockholders’ meeting to increase the capital stock to furnish the preferred stock contemplated by the offer, that such increase was subsequently authorized by the stockholders, and that the person making the offer was elected a director, appointed on a committee to carry out the arrangement contemplated, and made statements in writing which indicated that he understood that the corporation had accepted his offer.</p> <p>Corporations — New Jersey corporations — Capital stock — “Capital paid in cash or property.”</p> <p>The provision in the New Jersey corporation act prior to the amendment of 1901, that “at no time shall the total amount of preferred stock exceed two-thirds of the actual capital paid in cash or property,” is to be construed as meaning that the preferred stock shall not exceed two-thirds of the actual property of the company. The words “actual capital” in the act do not mean capital stock.</p> <p>There is a distinction between the capital of a corporation and its capital stock, though they are often used as interchangeable terms. The capital stock is clearly not the same as property possessed by the corporation; for the capital stock rem