Crawford v. Rohrer
| Decision Date | 08 March 1883 |
| Citation | 59 Md. 599 |
| Parties | AUGUSTUS CRAWFORD, WILLIAM H. H. BIXLER and others v. GEORGE F. ROHRER and others. |
| Court | Maryland Court of Appeals |
APPEAL from the Circuit Court of Baltimore City.
The case is stated in the opinion of the Court.
The cause was argued before MILLER, STONE, ALVEY, ROBINSON, and IRVING, J.
Robert H. Smith, and John M. Carter, for the appellants.
Samuel Snowden, for the appellees.
There is no dispute in regard to the existence of the debts upon which the bills were filed in these cases. They are admitted to be due by the corporation. The only question made in this Court is that of the liability of the defendants as stockholders for such debts due from the corporation; that is to say, whether, under the provisions of the statute, there is any ground for holding them liable on account of the stock subscribed by them?
The Natural Guano and Chemical Company of Baltimore City was incorporated and organized, under the General Incorporation Law of the State, in May, 1880. The capital stock of the company was fixed at $20,000, divided into one thousand shares, of the par value of $20 each. The stock was subscribed for and allotted to the defendants, as follows: To Zell, 245 shares; to Burton, 245 shares; to Wetzler, 242 shares; to Rohrer, 243 shares; and 25 shares to Kendig making, in all, the one thousand shares. These shareholders were made directors, and Burton was made president, Zell general manager, and Wetzler treasurer of the company. They carried on the operations of the company but for a brief period, before they suspended; and, at the instance of Wetzler and Rohrer, and upon the allegation that the company was totally insolvent, the Court appointed a receiver to take charge of and wind up the affairs of the concern. The defendants admit that the corporation is utterly insolvent and they all, with the exception of Zell, aver and insist that the stock subscribed for by them has all been fully paid for, and that they hold the same as paid-up stock. But, however this may be, there is a strange confusion, and no little conflict, in the statements of the parties as to how payment was made.
It appears that two of the defendants, Zell and Burton, had been in business as partners, manufacturing fertilizers by some patent process; and they had a leasehold interest in the premises on which the business was conducted, and they had machinery, certain patent rights, and also a stock of crude materials on hand to be manufactured. After the formation of the corporation, instead of paying the par value in money for the stock that was issued to them, they had valued and turned over to the corporation, the leasehold interest, the machinery, patent rights, and also the stock of raw materials, that belonged to them in their character of partners, composing the firm of Zell and Burton. According to the statement and contention of the defendants, Burton and Wetzler, the valuation, including everything, amounted to $16,000, and for which Zell and Burton were to receive stock but, according to the averment in the separate answer of Zell, and also according to his testimony, the valuation of the property turned over only amounted to $14,000, and the sum of $1646.95 was the separate valuation of the stock of unmanufactured materials, for which the company actually paid, not in stock, but in money. And if this latter statement be true, even upon the assumption that the entire property was valued at $16,000, the full capital stock has not been in reality paid, but there is still due thereon the sum of $1646.95. Wetzler swears that the entire valuation of all the property turned over to the corporation was to be paid Zell and Burton in the stock of the company, and that the amount was $16,000; and that it was by an arrangement with them that he and Rohrer were equalized in the division and issue of the stock--he and Rohrer paying four thousand dollars in cash, to make up the $20,000, the full capital stock of the company. It is not claimed that they paid more than $4000, and that is less than half the par value of the stock issued to them. There is a doubt raised upon the testimony, whether more than $3000 were in fact paid by them, but that fact becomes immaterial to the present plaintiffs, if the other allegation be established, namely, that the $1646.95 were paid to Zell and Burton for the crude...
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