Berry v. Rood’s Empirical Analysis

Citation profile

11 federal appellate · 2 district · 22 state decisions

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 35 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. ““Corporations: Payments of stock with property: Actual value. Property may be taken in payment of the capital stock of a corporation; but such property must be taken at a fair, just, lawful, bona fide valuation. The owners of such property or subscribers to such stock can not put in their property or labor at any valuation they may put upon it, but the corporation must receive in property or labor what it is reasonably worth in money. Nor is this rule relaxed by the fact that the corporators did not intend any fraud on the creditors of the corporation. “Purchase of stock by third parties: Notice. And purchasers of such stock, knowing that the property turned over to the corporation was valueless, or had been taken as a mere speculation, will be held to a compliance with such rule to the same extent as will the original subscriber. * * * “Rights of creditors. When a corporation is sent forth into the commercial world, accredited by the stockholders as possessed, in money or its equivalent in property, of a capital equal to the par value of its capital stock, every person dealing with it, unless otherwise advised, has a right to assume that such stock has been fully paid and to extend credit to it in the belief that the money or its equivalent in property will be forthcoming to meet his legitimate demands. Nor will such stockholder be relieved of his duty to respond to the creditor for the difference between the par value of the stock and what he actually paid for it, by the fa”

   2 later decisions quote this exact passage
   e.g. Babbitt v. Read · Brockett v. Winkle Terra Cotta Co.

2. ““The report of the referee shows that those defendants who bought shares of the treasury stock bought it in good faith, believing it had been fully paid, although they paid only fifty per cent, of its face value. “This treasury stock stood in the name of Jos. T. Bascom, trustee, and that fact was an indication to the purchasers that it had been previously issued, and that their purchases were not original takings of the stock. There was nothing in the fact that it was sold by the company at a discount to cause the purchasers to know that it had not been originally paid in full. Such stock is liable to fluctuation. If they had purchased with knowledge of the fact that the stock was unpaid, they would assume towards the creditors of the concern the liability of the original subscriber, jointly with him, or severally, as the creditor might elect; but that is not the fact as to these purchasers, and we hold that they are not liable in this suit.” In Bondurant v. Raven Coal Co. et al. (Mo. App.) 25 S.W.(2d) 566 , it was held that a Missouri statute, providing that no note should be considered as payment for corporate stock, applied only to original issue, and not to treasury, stock. The court said, in 25 S.W.(2d) 566 , on page 575:« “After the corporation has once issued its stock, and the subscriber has paid therefor, the statute is satisfied. A corporation may sell its treasury stock for cash or credit, for par or for market value, or upon any terms that a stockholder could sell”

   1 later decision quote this exact passage
   e.g. Slupsky v. Westinghouse Electric & Mfg. Co.

3. ““in Van Cleve v. Berkey, supra, the authorities are reviewed and the law clearly defined in an exhaustive opinion by Brace, J., in which all concurred, including the writers of the opinions in the two other cases. We feel that nothing is needed now to add to what is said in that opinion to demonstrate that our Constitution and statute mean that when property is taken in payment of stock the stockholder is liable at the suit of a creditor to account for the difference, if any, in value between the price at which the property was turned in to the company and the face value of the stock, and this is so even though no actual fraud be shown.””

   1 later decision quote this exact passage
   e.g. Babbitt v. Read