Grafner v. Pittsburg, Neville Island & Coraopolis Street Railway Co.

Per Curiam, The certificates of stock sued on in this case were issued by-directors of a corporation to themselves for services. There was no agreement by the corporation prior thereto to pay for such services, nor was there any by-law authorizing such payment. A contract or law of the corporation must precede payment for such services or there can be no recovery. Such is the law as laid down in the text books, and it has been uniformly followed by this court, the leading cases being Accommodation Loan, etc., Association v. Stonemetz, 29 Pa. 534, and, Kilpatrick v. Penrose Ferry Bridge Co., 49 Pa. 118. But it is argued that plaintiff took the stock without knowledge of its illegal issue. The court from sufficient evidence finds flatly against him as to the fact. It finds that the issue of the stock, by a court of record, common pleas No. 3 of Allegheny county, had been adjudged fraudulent, and that plaintiff had knowledge of this litigation. The legal conclusion of the court below that plaintiff is not a bona fide purchaser for value without notice necessarily follows the finding of fact. All the assignments of error are overruled and the judgment is affirmed.