Snodgrass v. Zander & Co.

Kirby, J., (after stating the facts). No question was made at the trial that appellee had no right to bring the suit because of an alleged assignment of the contract of stock subscription and it can not be insisted upon here. The preliminary stock subscription contract was signed by the subscribers thereto and constituted a valid agreement to take the stock upon which the corporation after its formation and the issuance of the preferred stock could maintain an action against the subscribers for the amount in payment. 10 Cyc. 388-392; Woodruff v. McDonald, 33 Ark. 102; Miss. O. & R. Ry. Co. v. Cross, 20 Ark. 443; Nulton v. Clayton, 54 Iowa 425; 6 N. W. 685; Peninsular Ry. Co. v. Duncan, 28 Mich. 130; Collins v. Southern Brick Co., 92 Ark. 507. Cyc. says: “A subscription paper may be informal, yet if the intent of the subscriber can be collected from it as where it states the names and residence of the shareholder and the number of shares taken by each it constitutes a subscription to the shares of the forthcoming company and the corporation may maintain actions upon it against the signers.” It states the exception in the case of preferred shares as follows: “Preferred stock being something more than a mere evidence of a shareholder’s right to participate in the management of the affairs' of the company and to receive dividends, but being in the nature of an interest-bearing security, it has been said that the implied promise of the company to issue such stock, and of the subscriber to pay for it where the subscription is to stock of this kind, are concurrent and dependent, and that an action by the company on such a subscription can not be maintained until it has issued or tendered the stock.” 10 Cyc. 390. No question is made in this case that the company was not organized nor that the preferred stock was not properly issued and tendered to the subscribers therefor. The court did not err in refusing to give appellants’’ requested instructions 1 and 4. One correctly states that if a defendant did not sign or authorize the signing of the subscription contract, they should find for that defendant, or defendants, but, by its terms, the jury were instructed that if one or more of the defendants did not sign or authorize the signing of the subscription contract, and it required the signatures of such a one as had not signed it to make up the amount of $4,000 preferred stock to be subscried that they must find in favor of all the 'defendants; while four directs a finding against the corporation if more than $4,000 stock was subscribed. It is true the contract of subscription says that it was understood that the amount of the preferred stock shall he $4,000, neither more nor less, but the contract is not a joint obligation and the striking of the name of one of the subscribers from the list or the unauthorized signature of another would not invalidate the contract as against those who had properly signed it and would not release them from the payment of their subscription upon a substantial performance of the contract by Zander & Company. Neither did the court err in refusing to admit certain testimony relating to the incorporation of the appellee company with $25,000 capital stock instead of $10,000 the amount some of the subscribers insisted it was stated to them on procuring their subscriptions the capital stock should be, nor in declining to give requested instructions relative thereto. Nothing is said in the written stock subscription contract limiting the capital stock to any particular amount, and it could not be varied nor contradicted, or an oral agreement or condition engrafted upon it, by parol testimony. 10 Cyc. 391; Collins v. Brick Co., supra. The jury, under proper instructions, passed upon the questions at issue relative to the substantial performance of the contract, and found in favor of appellee. There was testimony sufficient to support their finding on all controverted points, and there being no prejudicial error in the record, the judgment is affirmed.