| Show NEW MO f LAW RULE Original Stockholders Liable I for Companys Debts TREASURE HILL SUIT DECIDED I Court Holds that the Mining Claims Given in Exchange for the Stock Were Valueless and that the Subscribers I Sub-scribers to the Stock Having Paid I Nothing for I arc Liable to Creditors i Credi-tors of the Company for the Par I Value of the StockAssessments Dont Count I Ij j ai i Judge HIs yesterday handed down a decision of grout Interest mining men I In which it is hold that If properly transferred to a mining corporation for stocJx Is not of the fait estimated cash value for which 11 has been conveyed in payment of such stock the suhscrib i ers lo the stock are liable to the creditors I cred-itors of the incorporation io the amount I of the par value of the stock they hold I holdhe oninlon was delivered In the case F of J R Richardson vs the Treasure Hill Mining company and oihers Creditors I 1 Cred-itors of the Treasure IIIII company for i j labor und supplies assigned their claims I to Richardson to the amount df about 1 51700 Rkhardson sled time company I and the original incorporators and stockholders I was admitted that the I incorporation was Insolvent and it was I sought to make the Incorporators and Hlookholders individually liable on the I ground that they had paid nothing for the stock the mining claims which they gave in exchange for It being alleged to be valueless Time company was organized or-ganized with a eniiital stock of 23000 divided into a lee number of shares of 1 each The subscribers to the stock I paid for It by four leases on the Vale Evoa Cornucopia and Treasure mining claims in the TInllc district I Before the expiration of tIle leases l they were abandoned because the cot porallon had expended about 33000 to get out of the mine 10000 worth of ore oreIn In passing > upon the case the court says I find from the evidence that these leases were of no value whatever and thai iherefore the capItal stock of the corporation was not paid by the corporators ns set out In the said articles arti-cles of agreement The ground of this decision In brief Is thai Die statute of this State under which Ibis corporation was crealed requires re-quires that property which has been conveyed to the torporallon In payment of Its lock shall be of tile fair estimated esti-mated cash value for which It has been conveyed In payment of such stock The Supreme court uf this Slate has deckled ilmt where properly taken in payment of loc Is worthless tile subscribers sub-scribers will be liable as for unpaid subscriptions Under the statute as well as at common law as between the general creditors of the corporation and the subscribers to the stock where the corporation has become insolvent the stock subscribed for must have been paid for Jn money or in moneys worlh The defendants contended thai even If the leases wore worthless the fact lhal the subscribers lo the stock had paid assessments for the purpose of carrying on the business of the company com-pany to the amount of the pal value of tholr stoci or more released them from I further llabilitj Judge lilies however held that the levying and paying of assessments I as-sessments were matters between the stockholders themselves and would be i I good Inter sese but not as against the I general creditors of the corporation The opinion further said The Clrlhel general gen-eral creditors of ibis corporation arc enlllled to recover In lhis action because be-cause the articles of agreement by which the corporation was formed did not state the truth respecting the value of the property taken In payment of the stock In a similar case the Supreme court of Nevada said When the law requires a public declaration of the amount of the capital upon which a1 corporation operates II contemplates n truthful statement In which thc general gen-eral public dealing with the corporation may confide The publication of the articles of agreement and others con I I stating instruments of the corporation is made for the benefit of the public for I the corporallon or Its stockholders If these p blcl recorded instruments instru-ments be not substantially true as respects re-spects the solvency and assets of the corporation the subscribers to the stock and those In privity with them will at the suit of a general creditor of the insolvent corporation be compelled com-pelled to make good that which they have thus publicly avowed and declared de-clared In this case the plaintiff is entitled to have findings and decree in his favor agalnsj all the defendants except WIT I W-IT Cunningham DI C Roberts and Agnes Paris who appear fromthe evidence evi-dence not to be original subscribers but Innocent purchasers of the stock for value The plaintiff must recover the amount sued for oxcept that the Johnson John-son claim musl be reduced to 20000 und excepting the claim of F B Cook who was an incorporator and extended credit to the corporation In such n way as to not entitle him to recover this action and should therefore be dismissed dis-missed without prejudice however as between the corporation and Cook or his assignee |
