Wilder National Tavern System v. Jillson

Wiest, J. Plaintiff is an Illinois corporation, organized February 23, 1926. Defendant was interested in its formation and organization and tendered a subscription to its capital stock. This tender was not effective because of change in the proposed capitalization. April 3, 1926, defendant, in Michigan, signed a subscription for stock to the amount of $1,050, and mailed it, with his check for $100, to an officer of the company at St. Louis, Missouri. The check was taken to Columbia, Illinois, where the home office of plaintiff was located, and there cashed and stock certificates executed in favor of defendant and kept by the company under the terms of the subscription. This suit was brought to recover the balance due on the subscription and defendant prosecutes this appeal from a'judgment awarded plaintiff. The decisive question presented is whether the subscription violated the so-called blue sky law of Illinois, where it was accepted and shares of stock executed. If defendant was interested in promoting the organization of the corporation and agreed to subscribe for shares of stock therein when it was organized, then there was no violation of the blue sky law of Illinois. At the date of organization of the corporation defendant was in Germany and sent a radiogram, asking reservation of stock for him in the new company. The later subscription is explained by change in the capitalization. The case does not present an instance of sale of corporate stock to a purchaser, upon solicitation *481 after incorporation, bnt a subscription by one interested in tbe creation of the corporation, and defendant’s subscription falls within the issue of stock to organizers of the corporation. The Illinois blue sky law exempts from its provisions distribution of capital stock to stockholders without incurring any expenses or liability therefor, such as commissions. Cahill Rev. Stat. Illinois, chap. 32, ¶258, subd. (2); Smith-Hurd Rev. Stat. Illinois, chap. 121%, § 100(2). The judgment is affirmed, with costs to plaintiff. Clark, C. J., and McDonald, Potter, Sharpe, North, Fead, and Butzel, JJ., concurred.