Alexander v. North Carolina Savings Bank & Trust Co.

• Decision Date: 03 May 1911
• Citation: 71 S.E. 69,155 N.C. 124
• Parties: ALEXANDER v. NORTH CAROLINA SAVINGS BANK & TRUST CO.
• Court: North Carolina Supreme Court

71 S.E. 69

155 N.C. 124

ALEXANDER v. NORTH CAROLINA SAVINGS BANK & TRUST CO.

Supreme Court of North Carolina

May 3, 1911

Appeal from Superior Court, Mecklenburg County; Long, Judge.

Action by S. B. Alexander, Jr., against the North Carolina Savings Bank & Trust Company. Judgment for plaintiff, and defendant appeals. No error.

A subscription to stock of a corporation may be made on condition that there shall be no liability until the corporation has received actual subscriptions to its capital stock to a specified amount.

T. J Gold and Stewart & MacRae, for appellant.

Thos W. Alexander, for appellee.

PER CURIAM.

This action was brought to recover the amount of a promissory note, $250, which had been given by the plaintiff to the defendant in part payment of the purchase price of stock in the defendant company, and which was afterwards paid to it by the plaintiff, and also to have surrendered for cancellation a note for a like amount given by the plaintiff to the defendant for the balance of the purchase money. Plaintiff had contracted to buy the stock and to pay for it $500; but as he alleged, upon the express condition that liability on the notes should not accrue until the defendant had received actual subscriptions to its capital stock in the amount of $250,000, and that, if that amount was not subscribed, the notes should be void and of no effect. This condition or stipulation plaintiff alleged was contained in a collateral and contemporaneous written instrument which had been lost and the parties respectively offered proof as to its contents; the plaintiff's evidence tending to show that there was such a stipulation in the writing, and the defendant's the contrary, and that the reference was not to subscribed, but to authorized, capital stock.

The court submitted issues to the jury, which, with the answers thereto, are as follows:

(1) Was the defendant, the North Carolina Bank & Trust Company chartered by special act of the Legislature, and, if so, when? Answer: Yes, by articles of association filed with the Secretary of State and certified by him June 9, 1906, as per page 1, Book of Company, filed in evidence; and by Act of Assembly ratified 15th of March, 1907 (Priv. Laws 1907, c. 307); also see section 5 as amended and ratified, Special Session, Acts of General Assembly, January 27, 1908 (Priv. Acts 1908, Sp. Sess., c. 3)--all of which is answered as set out in evidence.

(2) Did the plaintiff subscribe for 10 shares of the capital stock of the par value of $100 each, in the defendant company, and, if so, at what time? Answer: Yes, July, 1906.

(3) Did the plaintiff pay into defendant company $250 upon his subscription to the defendant and in response to the first call? Answer: Yes, on the 5th day of August, 1906.

(4) Did the plaintiff execute note for $250 September 10, 1907, for second installment on subscription? Answer: Yes.

(5) Did the plaintiff subscribe for stock in the defendant company upon the condition and assurance that the subscribed capital stock would be $250,000 and that his subscription thereto was not to be binding upon him unless and until the $250,000 was actually subscribed to the stock of the company? Answer: Yes.

(6) If so, did the plaintiff waive the alleged condition that the subscription to the capital stock should amount to at least $250,000? Answer: No.

(7) Did the defendant company fail to secure the amount of $250,000 of bona fide subscriptions to the capital stock, and did the defendant reduce its capital stock from $250,000, as alleged in the complaint? Answer: Yes.

(8) Did the defendant release bona fide, solvent subscribers to its capital stock without the knowledge or consent of the plaintiff, and after the plaintiff had made his subscription to the stock under the conditions set forth in this complaint? Answer: Yes.

(9) Has there been a fundamental change in the charter of incorporation of the defendant company since the date of plaintiff's subscription, without the knowledge or consent of the plaintiff? Answer: Yes.

(10) In what amount, if any, is the defendant indebted to the plaintiff? Answer: $250, with interest from August 5, 1906.

The defendant contended that, if there was any such condition annexed to the subscription of the plaintiff, it had been waived by him, in that, after he had learned that the defendant had not secured $250,000 of subscriptions to its stock, he appointed one Williamson, as his proxy, to represent him at a corporate meeting, and that he was so represented. At the meeting the stockholders of the company released certain subscribers, including the plaintiff, so that its stock was greatly reduced. At no time did...