FOSTER V. SEYMOUR.
depositions, evidence, and exhibits introduced by the defendants are incompetent or immaterial, and the cost of introducing and printing should not be charged against the plaintiff. He specifies 18 different items. The counsel for the defendants makes an affidavit expressing a contrary opinion. Under this state of facts, it is a sufficient ground for denying the application, that the plaintiff did not, at or before the final hearing in June, 1884, or before the taxation of costs, move to strike out the evidence in question. Whatever objections may have been taken to any of the testimony at the time it was introduced, (and only such objections could be considered, in any event,) they were waived by the laches. It results that the taxations are all of them affirmed, except that, in each of the suits Nos. 1,9, and 10 a docket fee of $20 is to be added.
who sues, etc., v.
(:!ircuit Oourt,8. '" New York.
CORPORATION-IsSUE AND EXCHANGE OF STOCK FOR OTHEH PROPERTY BY THUSTEES-FRAUD-AccOUNT.
Where the statute under which a company is incorporated authorizes the trustees to issue stOCK and exchange it for property, and declares that when' exchanged such stock shall be taken to be l'ull-paid stock and not liable to further calls; and the trustees, being the only members of the corporation, exchange the whole capital stock in payment for the purchase of mining property owned hy themselves, and, after division and distribution of the stock among themsclves,sclJ it as fnlI-paid stock to innocent purchasers,-such purchasers cannot maintain a suit to compel the trustees to account to the corporation for a fraudulent disposition of its capital stock.
In Equity. W. F. Scott, for plaintiff. H. M. Ruggles and T. W. Osborn, for defendants. WALLACE, J. The bill of complaint is filed by the complainant as the holder of certain shares of stock in the Central Arizona Mining Company against that corporation and its trustees personally to reqnire the trustees to account to the corporation for a fraudulent disposition of its capital stock. The bill alleges, in substance, that the whole capital stock of the corporation, which was fixed and limited by the certificate of incorporation of the company at 100,000 shares of $100 each, was exchanged by the trustees of the corporation in payment for the purchase of mining property owned by the trustees personally, or some of them, the value of which did not exceed $100,000, as the trustees knew. The bill further alleges that the trustees, after such exchange of the capital stock, divided and distributed it among themselves, and sold it as full-paid stock to innocent purchasers including the complainant; and the trustees realized large sums v.2SF,no.2-5
of money therebywhtch they applied to their own use. The bill also contains allegations for the purpose of showing that the trustees exert entire oontrol over the oorporation, and that the corporation r,efuses to bring an action against them for relief in the premises. It is not alleged in the bill that when the stook of the corporation was exchanged for the mining property any part of the capital stook had been subscribed for, or that any part of it had ever been paid into the oompany, or that it represented any corporate property; but the bill alleges that the trustees issued it, and delivered it as full-paid stock to themselves in exchange for the mining property. The statute under which the company was inoorporated authorizes thetnlstees to issue stock and exohange it for property, and deolares that when exchanged such stook shall be taken to be full-paid stock, and not liable to further calls. Laws N. Y. 1853, c. 333, § 2. The statute, however, permits the trustees to exohange stock to the amount only of the value of the property for which it is exchanged. Upon these facts the oorporation has no right of action against the trustees. The corporation lost nothing by the transaction disolosed by the bill, except the paper which was created and called capital stock. None of its capital was diverted; The scrip was not capital stook. The capital stock of a corporation is the money or property which is put into a corporate fund by those who subscribe for stock, and thereby; agree to beoome members of the corporate body. Unless it represents capital oontributed, or agreed to be paid in, it has no value. Burrall v. Bushwick R. Co. 75 N. Y. 216; Sturges v. Stetson, 1 Biss. 246. The property it reoeived in exchange for the scrip had some value; certainly as much as the scrip had. There was no fraud upon the corporation. At the time the scrip was exchanged for the mining property, the trustees were all there was of the corporation. There were no stookholders unless they were stockholders. What was done was done by the corporation. By the exchange the corporation got the mining property, and gave it back again to those from whom it got it, divided into 100,000 shares of the nominal value of $100 each. The Ambrose Lake Tin cf; Copper Min. Co. (Ex parte Taylor,) L. R. 14 Ch. Div. 390; Re Seamless Box Co. L. R. 17 Ch. Div. 46. The transaction as alleged was a fraud upon the public. It was equivalent to an overissue of stock by a corporation to its stockholders. It was calculated to lead parties, dealing with the oorpora tion in ignorance of the faots, to believe that it had a paid-Up capital stock of $10,000,000, and representing a corporate fund of that amount invested in mining property. By putting ant the scrip, the trustees represented to the public, who have no means of knowing of the private oontraots made between a oorporation and its stookholders, that the oapital stock had been subscribed for and paid in. It was not a fraud upon stockholders, however, becanse there were none; nor neoessarily upon persons subsequently becoming stockholders, beoause the stock was full-paid stock, and not liable to any further oalls in
GREEN V. COOS BAY WAGON.ROAD CO.
the hands of those who might purchase it. Scovill v. Thayer, 105
U. S. 143. A purchaser of the stock would not be injured by the transaction unless he paid more for it than it was worth; and every purchaser would stand upon the particular circumstances of his purchase. If the original transaction, in connection with the special facts of a purchase of stock, should operate as a fraud upon a purchaser, the cause of action would be his, and not that of the corporation. The fraudulent character of the transaction was imparted to it by the corporation itself; that is, by those who represented all there was of the corporation. The remedy of the complainant, if he bas been deceived into the purchase of stock by false representations as to its value, is against those who have misled him. Even if he could recover against the corporation or against the trustees, (see Fosdick v. Sturges, 1 Biss. 255,) the corporation has no cause of action against the trustees. Upon the argument of the demurrer, the opinion was expressed that the bill was defective in not alleging the necessary efforts of the complainant to set the corporation in motion to seek such redress as it ought to seek, within the rule declared in Hawes v. Oakland, 104 U. S. 460, and subsequent cases in the supreme court. It has been deemed proper, however, to meet the main question in the case in disposing of the demurrer. The demurrer is sustained.
GREEN V. C003 BAY WAGON ROAD Co.
(Circuit Oourt, D. Oregon. March 2, 1885.)
STATUTE Oll' LIMITATIONS.
An agreement or promise made without a consideration to postpone or extend the time of payment of a debt or demand is void, and does not, therefore, prevent the running of the statute against the right of the creditor to maintain an action thereon.
From an acknowledgment of the existence of a debt under circumstances that indicate a willingness or liability to pay the same, the law will imply l\ promise to pay, upon which an action may be maintained during the statutory period of limitation thereafter.
NEW PROMISE-How PLEADED.
In pleading a new promise, or an acknowledgment or agreement from which such promise will be implied, it need not be alleged that the same was made in writing, but that fact will be presumed until the contrary is shown.
Action to Recover Money. Thomas N. Strong, for plaintiff. James F. Watson and Edward B. Watson, for defendant. DEADY, J. This action is brought by A. T. Green, of California, against the defendant, a corporation duly formed under .the laws of