First Nat. Bank of Peoria v. Peoria Watch Co.

• Decision Date: 19 June 1901
• Citation: 60 N.E. 859,191 Ill. 128
• Parties: FIRST NAT. BANK OF PEORIA et al. v. PEORIA WATCH CO. et al.
• Court: Illinois Supreme Court

191 Ill. 128

60 N.E. 859

FIRST NAT. BANK OF PEORIA et al.

v.PEORIA WATCH CO. et al.

Supreme Court of Illinois.

June 19, 1901.

Appeal from appellate court, Second district.

Bill by the First National Bank of Peoria and another against the Peoria Watch Company and others. From a judgment of the appellate court (93 Ill. App. 502) dismissing the bill, complainants appeal. Affirmed.

Arthur Keithley, for appellants.

Jack & Tichenor, for appellees.

CARTWRIGHT, J.

Appellants, the First National Bank of Peoria and Charles R. Wheeler, a stockholder of the Peoria Watch Company, by their amended bill filed in this case in the circuit court of Peoria county alleged that said company was organized as a corporation in the year 1885, with a capital stock of $250,000; that the appellee Johnson L. Cole subscribed for 200 shares of stock, of the par value of $20,000; that the appellees Moses N. Gish and Joseph N. Brodman became subscribers for stock to the amount of $500 each; that the corporation became indebted to the complainant the First National Bank, and afterwards ceased doing business, abandoned its corporate existence, disbanded, and disorganized; that said Cole, Gish, and Brodman never paid their subscriptions, or any part thereof, and that all other subscriptions were paid except that of one Truesdale, and those of certain others who had become insolvent. The corporation and its stockholders were made defendants, and the prayer of the bill was that the delinquent stockholders be decreed to pay the entire amount of their subscriptions, and that a receiver should be appointed, and the corporation wound up. The defendants were all defaulted except Cole, Gish, and Brodman, each of whom answered. Cole admitted that he made the subscription of $20,000, and alleged that he was released from his subscription, which was assumed by the corporation; that he assigned his subscription to the corporation, and it sold the entire amount of the stock for which he had subscribed to other parties, and received payment therefor in full, and issued certificates of the stock to such purchasers. Gish answered that he never subscribed for five shares of stock, but did subscribe for two and a half shares, at the par value of $250; that he disputed the claim that he subscribed for five shares; and that the controversy was settled by the corporation taking payment for two and a half shares of stock, and he surrendered the balance of the alleged subscription. Brodman answered that he subscribed for five shares, and paid the first assessment of 10 per cent.; that he claimed a defense against the subscription; and that the corporation forfeited the stock, retaining what he had paid, and reissued the stock to persons who paid in cash the full par value of the same. Replications were filed, and the cause was referred to a master, who reported in favor of the defendants, and recommended a dismissal of the bill. The court overruled the exceptions of the complainants to the master's report, and entered a decree dismissing the bill, which has been affirmed by the appellate court.

Complainants proved that the corporation was indebted to the First National Bank in the amount of its promissory note dated March 18, 1891, for $10,607.41, drawing 8 per cent. interest. Most of the facts were then agreed upon by written stipulation, with some oral evidence, and the facts so agreed upon and proved are as follows: The defendant Peoria Watch Company was organized as a corporation in the year 1885, with an authorized capital of $250,000, which was never increased. The defendant Johnson L. Cole was one of the original subscribers to the amount of $20,000. The defendants Moses N. Gish and Joseph N. Brodman each subscribed for stock to the amount of $500. Cole paid nothing on his subscription, and soon after the organization the directors passed a resolution assuming the stock subscribed for by him, and providing for obtaining new subscribers for the same, and issuing said stock to new purchasers as it should be paid for in full. The directors then took subscriptions for said stock subscribed for by Cole to the amount of between $6,000 and $7,000, which was fully paid for, and certificates of the stock were issued to the subscribers. The defendant Moses N. Gish settled with the corporation for one-half of his original subscription, and he took two and a half shares, which were paid for, and the company released the balance. The defendant Joseph N. Brodman paid only 10 per cent. of his subscription. About March 1, 1889, the directors issued a statement to the stockholders that the amount of stock paid up and issued was approximately $210,000; that there remained about $40,000 of stock, which had been forfeited by the subscribers, and never paid up or issued; that the subscribers therefor were insolvent, and the management had decided to ask the existing stockholders to take said unissued stock in proportion to stock which they held, and to pay the par value thereof to the company. The stockholders accepted the proposition, and subscribed for and paid into the treasury the par value of all said stock, and at least $40,000 so subscribed was paid into the treasury. The several balances...