California Sugar Manufacturing Co. v. Schafer

McKinstry, J.: The action was brought to recover of defendant the sum of $500 by reason of his subscription to the paper writing following: “ Whereas, it has been resolved to incorporate a company under the laws of the State of California, for the purpose of manufacturing sugar from melons and other fruits, to be known as the 'California Sugar Manufacturing Company,’ we therefore, for the purpose of raising a working capital, agree to take, and hereby do subscribe to the number of shares of the working stock of said company, set opposite our respective 'names, agreeing to take the same and pay therefor $5 gold coin for each share subscribed for by us respectively—$1 per share to be paid at the time of subscribing, and $1 more per share every thirty days thereafter, until the whole $5 shall be paid into the treasury—in case it is required. “ California Sugar Manufacturing Company. J. Pool, F. A. Roe, [Seal.] Secretary. President. No. Shares. No. Shares. Signatures. Date. Fifty shares....... ... 50....... . P. H. Gardiner. .. Fifty shares....... ... 50....... .J. F. Wilcox..... .. 6?19 One hundred shares ...100 ...... .John Schafer..... ..6219” (And other persons whose names are here omitted.) [398] The words “California Sugar Manufacturing Company, J. Pool, Secretary; F. A. Roe, President,” were inserted, and the corporate seal affixed, at some time after the other names were subscribed. The plaintiff was not a party to the subscription paper, nor has it acquired any rights under it, as successor of the subscribers (other than defendant) or otherwise. No one of such subscribers is shown to have joined in the formation of the corporation plaintiff, or to be a member thereof. The present action is not brought to recover an assessment. If the subscription paper could be treated as an agreement to purchase stock of the company, there would be no mutuality in the contract, since the presumption is that the corporation had no stock to sell. (Civ. Code, §§ 343, 344.) The complaint does not allege, nor does the evidence establish, that plaintiff owned any stock, or that the disposition of stock by sale was authorized by the by-laws, or by vote of the stockholders. If the subscription paper was signed after the corporation was formed, and even if the subscription can be considered as the equivalent of a subscription for stock, plaintiff has no power to treat the subscribers differently from other stockholders, or to recover from them other than the amounts of assessments duly levied. Judgment and order affirmed. Ross, J., and McKee, J., concurred.