El Dorado Farmers' Union Warehouse Company v. Eubanks

• Decision Date: 28 March 1910
• Citation: 126 S.W. 1075,94 Ark. 354
• Parties: EL DORADO FARMERS' UNION WAREHOUSE COMPANY v. EUBANKS
• Court: Arkansas Supreme Court

126 S.W. 1075

94 Ark. 354

EL DORADO FARMERS' UNION WAREHOUSE COMPANY v. EUBANKS

Supreme Court of Arkansas

March 28, 1910

Appeal from Union Circuit Court; George W. Hays, Judge; affirmed.

Judgment affirmed.

W. M Van Hook and Powell & Taylor, for appellant.

The defendant is liable on his subscription. 64 Ark. 637; 70 Ark 451; 80 Ark. 543; 86 Ark. 287.

Marsh & Flenniken and Warren & Smith, for appellee.

Appellant could not sue for subscription after all the shares authorized by its charter had been taken. 24 N.Y. 159.

OPINION

HART, J.

This is an action by the Farmers' Union Warehouse Company, a corporation, to recover from the defendant, C. D. M. Eubanks twenty-five dollars upon his subscription to stock in said corporation. It was begun before a justice of the peace. The judgment of the circuit court was in favor of the defendant, and the plaintiff has duly prosecuted an appeal to this court.

The facts are undisputed, and involve the single proposition as to the liability of the defendant to pay twenty-five dollars alleged to be due plaintiff on a subscription to stock. The contract was in writing, and recites that defendant subscribed for one share of twenty-five dollars in a corporation to be formed for the purpose of erecting and operating a cotton warehouse at or near El Dorado in Union County, Arkansas.

The corporation was organized, and its charter, among other things, provides:

"Third. The place of business is to be located at El Dorado, Union County, Arkansas, and its office for the transaction of business shall be in El Dorado, Arkansas, or at such other place as the board of directors may select.

"Fourth. The general nature of the business proposed to be transacted by this corporation is the purchase, operation and maintenance of cotton compresses, gins, grain elevators, wharves and public warehouses for the storage of any and all kinds of produce and commodities and the purchase and sale of same, and the carrying on of a general warehouse business."

"A material modification of the plan of a proposed corporation, so that the actual charter differs essentially from the corporation as contemplated by the subscription contract signed before incorporation, releases such of the subscribers as object thereto." Cook on Corporations (6 ed.), § 194; see also 10 Cyc. 405.

"Where the amount and nature of the capital stock, the business the corporation proposed to engage in and the situs of its organization are set out in the contract of subscription, a subscriber may defend an action on such subscription where without his consent, and in the absence of estoppel or waiver, the corporation organized is different in purpose and character, or has a different capital, or varies in any essential particular, from the corporation described in the subscription contract. On this theory, a subscriber who contracted to take stock in a corporation to be formed for a particular and specified purpose can not, without his consent, be compelled to pay money towards the formation even for an additional and distinct purpose. In an action to enforce a subscription made to a corporation to be organized for a certain...