Isbester v. Murphy Mfg. Co.

Mr. Justice Bioelow delivered the opinion of the court. Six errors are assigned on the record, but they are all substantially embraced in the first error, which challenges the decree of the court in sustaining appellee’s demurrer to appellant’s bill and dismissing the bill. Assuming that the company as between itself and its stockholders could issue stock as fulty paid up when in fact nothing had been paid on it, and that when such stock wras assigned by the holder of it for value paid to him by an innocent purchaser, the company would be estopped from assessing the stock to the assignee of it, for the amount that ought to have .been paid on it but was not in fact paid, or for any other amount, the principal question then left to be inquired into is, do the allegations of the bill make a case within the rule stated, and of which a court of equity should take cognizance ? It is not stated in the bill that the orator purchased the stock of any other person or that the certificate was issued in lieu of a certificate theretofore issued to any one; but the statement is, “ that said Isbester received said certificate of stock for a valuable consideration from a third party, who caused said certificate of stock to be issued direct from said corporation to said Isbester, and that said Isbester received said certificate of stock relying upon the said statement in said certificate that it was non-assessable.” While it is apparent that different meanings may be drawn by different persons from the language used, one that the orator had purchased the stock that was formerly owned by a third party, and that party had procured a new certificate (which contained the word “ non-assessable,”) to be made direct to the orator, and the other meaning that the “ third party ” had as agent of the orator procured the issuance of the certificate in its present shape for a valuable consideration, but less than the par value of it, we are unwilling to say that the .bill appears to have been drawn with a design to conceal the real facts as to how the certificate came to be issued as “ non-assessable;” but there is to us a darkness about the pleading that is not easily dispelled; and applying the well known rule that a pleading must be taken most strongly against the pleader, a conclusion may b 3 drawn that the “ third party ” was such only in name, and was in fact acting for appellant, and by this device an attempt was made to circumvent the law by having the word “ non-assessable ” put in the certificate. Which one of these views is the correct one to be taken, we are not necessarily called upon to determine. The bill seems to have'been framed upon the theory that the directors of the company, by one fell stroke, could forfeit appellant’s stock for the non-payment of the assessments, unless they were restrained by injunction from doing so. Such a theory has no basis on which to stand. The power of the board of directors to forfeit the stock of delinquent stockholders for non-payment of their assessments is given by section 7 of the corporation act; and the mode of exercising the power is given in the section in language as follows: “ The directors may, by by-law, prescribe other penalties for a failure to pay the installments that may from time to time become due.” hTo resolution of the board of directors forfeiting appellant’s stock would be of any avail. A by law is general and operates on all delinquent stockholders alike. Budd v. Multnomah St. Ry. Co., 15 Oregon, 413 (3 Am. State Rep. 169). There is no allegation in the bill that the board of directors of appellee company have ever adopted any by-law in reference to the forfeiture of the stock of delinquent stockholders as a means of collecting delinquent assessments, and the bill is barren of even a threat that they intend to adopt any. From anything that we can discover in the bill, the sole purpose of making the call on delinquent stockholders to pay up the delinquencies due on their stock, was to prepare the way to collect the assessments in a court of law. We are unable to understand how appellant can have any standing in a court of chancery, and since his rights can be fully protected in a court of law, he must, if assailed, go there for protection, as his bill now stands; but since it is possible that sufficient facts exist that have not been set forth in the bill which may entitle appellant to relief of some kind, the bill should not have been dismissed absolutely, notwithstanding appellant did not ask leave to amend it; and accordingly the decree will be modified by this court, dismissing the bill without prejudice to appellant, and as modified the decree is affirmed. McDowell v. Cochran, 11 Ill. 31; Sheldon v. Harding, 44 Ill. 68; 6 Ency. Pleading and Practice, 994. Decree modified and affirmed.