Real Estate Trust Co. v. Riter-Conley Manufacturing Co.

Citations

• 223 Pa. 350
• 72 A. 695
• 1909 Pa. LEXIS 539

Syllabus

<p>Corporations — Bonds—Underwriting agreement — Conditional subscription — Evidence.</p> <p>1. Where on a bill in equity to enforce a written subscription to an underwriting agreement for the purchase of the bonds of a corporation, one of the defendants in his answer to the bill claims that his subscription was a conditional subscription by reason of a parol collateral agreement made at the time of his signature, and the answer is supported by the testimony of one uncontradicted witness, strongly corroborated, a finding by the trial judge that the subscription was in fact conditional will be sustained.</p> <p>2. In such a case where it appears that the underwriting agreement was tripartite, the fact that one of the defendants’ subscription was conditional does not defeat the defense of such defendant where it appears from the very terms of the contract that if such subscription fails, the other subscribers are all released from liability; nor in such a case can the assignee of the original seller of the bonds claim that he is entitled to recover, although his assignor was not. The assignee in such a case takes no better title than the assignor, and is bound to inquire of the subscribers if they had any defense to their subscription.</p>