Wolf v. Excelsior Automatic Scale & Supply Co.

Citations

• 270 Pa. 547
• 113 A. 569
• 1921 Pa. LEXIS 436

Syllabus

<p>Corporation—Stock subscription—Repurchase of stock—Rights of creditors and other stockholders—-Intervening equities—Burden of proof. v</p> <p>1. A subscription to tbe capital stock of a corporation is not only an undertaking with, tbe company but with all tbe other subscribers.</p> <p>2. Such contract is trilateral, and, if fraudulent or unenforceable between two of the parties, it may be enforced for the benefit of a third.</p> <p>3. The rules of law with respect to the liability to repurchase the stock or refund money subscribed and paid are much the same as those affecting the liability of the subscriber to pay.</p> <p>4. A strictly private corporation has the right to agree, in a stock subscription, to repurchase' the stock within a given time; and if no injury is suffered by creditors or other stockholders, such agreement will be enforced.</p> <p>5. If intervening equities are set up as a defense against the enforcement of such agreement, the burden of proof is on the corporation so asserting.</p> <p>6. If another stockholder objects he must show an equity superior to that of the stockholder who is attempting to withdraw his contribution from-the corporate fund.</p> <p>7. A provision that' the subscriber should demand repayment within ninety days from the last payment on the subscription, is not a bar to his right to recover, particularly where no complaint was made as to time.</p> <p>8. If the subscriber produces the stock certificate as provided by the agreement, the fact that there has been an intermediate assignment, will not prejudice his right to a refundment.</p> <p>■ 9. The fact that at the time of the argument the corporation had gone into bankruptcy, and counsel appeared for the bankrupt, is immaterial, if it does not appear when the liabilities were incurred upon which the bankruptcy was predicated.</p>