Liebke v. Knapp

• Decision Date: 31 October 1883
• Citation: 79 Mo. 22
• Parties: LIEBKE et al., Appellants, v. KNAPP.
• Court: Missouri Supreme Court

79 Mo. 22

LIEBKE et al., Appellants,

v.KNAPP.

Supreme Court of Missouri.

October Term, 1883.

Appeal from St. Louis Court of Appeals.

AFFIRMED.

Geo. M. Stewart and J. H. Wieting for appellants.

Glover & Shepley for respondents.

SHERWOOD, J.

The plaintiffs under the provisions of the statute, moved the circuit court that execution issue against the defendants, claiming that the latter were the holders of certain shares of unpaid stock in the Illinois and St. Louis Bridge Company.

The contract made with the bridge company, as evidenced by a communication addressed by John Knapp to C. K. Dickson, president of that company, and his reply thereto, is set forth in the following letters, both bearing date September 30th, 1867:

John Knapp to C. K. Dickson, president of the bridge company:

“I am desirous of becoming an associate in the bridge company, and hereby authorize you to propose my name for that purpose, and if elected will take $20,000 dollars of stock of said company.”

On the same day C. K. Dickson, as president, addressed the following letter to John Knapp:

“This is to certify that your proposition to subscribe for $20,000 of the stock of the bridge company is made with the express understanding that the first 5,000 of said subscription is to be deemed as paid in full by you. When a call is made on the stockholders beyond $5,000 or twenty-five per cent of their subscription, you will be expected to pay such calls, or to notify me of your decision to limit your subscription to $5,000, instead of $20,000, when your interest in the company will be limited to that sum, which will be deemed full paid stock.”

The subscription thus made was subsequently enlarged to $25,000 and transferred to the joint names of the defendants. All of the amount thus subscribed was paid on calls from time to time, except the $5,000, for which a credit was duly given and entered on the books of the company, after the services for which the credit was allowed had been rendered.

The circuit court on hearing the evidence adduced, found for the defendants, thereby determining as a matter of fact that payment of the $5,000 had been made; and as no declarations of law were asked on either side, no law point has been saved, so that the only question the record presents is whether there is any substantial testimony in the evidence to establish the payment claimed by the defendants to have been made.

1. CORPORATION: stook: payment.

The authorities are not in entire accord as to whether the payment of a stock subscription can be made in anything else than money, some holding one way and some the other. But the class of authorities which declare that a subscription may be paid otherwise than in money, we regard as asserting a more reasonable doctrine, a doctrine better adapted to the practical affairs of business life. Regarding the matter then in this light, we shall rule that payment of stock subscriptions need not be in cash, but may be in whatever, considing the situation of the corporation, represents to that corporation a fair, just, lawful and needed equivalent for the money subscribed. Any other doctrine than this would, as it seems to us, place a corporation at a disadvantage, under a disability not contemplated by the law and under which a natural person does not labor. Besides, a corporation, unless prohibited by statutory provisions, has a general capacity of contracting which the common law concedes to every one ordinarily competent to enter into binding engagements. Baile v. Ins. Co., 73 Mo. 371, and cases cited.

2. _____: stock paid up in advertising: public policy.

The services to be rendered by the defendants were to consist of statistical articles, communications, etc., to be furnished by the friends of the bridge to be published from time to time in the Missouri Republican, and were similar in character to those other persons pay for. These articles were furnished and published to the full extent of the credit entered on the books of the bridge company, and the testimony tends to show that the value of the services rendered and of the privileges thus afforded in the Republican, were even greater than the amount charged and agreed to be paid prior to the services performed. The objection is made that no data were given as to the precise value of the services rendered and of the privileges afforded. This objection is more specious than sound. In the very nature of things it would be impossible to tell with any degree of accuracy just how much in dollars and cents each day's publication of articles, statistical and otherwise, as well as communications, would be worth; and more than all, to tell beforehand just how long such publications would be required. Let us, as we lawfully may, look at the surroundings of the parties at the time the contract complained of was made and thus determine if it was such an one as the law will sanction. A great public enterprise was afoot, no less than the spanning of the Mississippi River with a bridge, connecting two states and affording easy, rapid and uninterrupted transit for the travel and commerce between them as well as the travel and commerce of the whole country. That enterprise, in and of itself, was in every respect and particular legitimate and praiseworthy, and had previously received the sanction of the congress of the United States. In order to its success it was pre-eminently necessary that the public mind should be awakened and informed, touching the magnitude and importance of the undertaking, and of the prospective benefits to be derived from its being carried into successful execution. Large sums of money were necessary to be raised to bring about the completion of the bridge. Large sums were necessary to be raised to condemn or purchase property to be used in connection with the bridge and its approaches. The means chosen by the company, it would seem, were wisely chosen, and were doubtless the best that could have been employed. If the company had seen fit to issue circulars containing facts, statistics and arguments in favor and in furtherance of the enterprise, no doubt, it seems, could have arisen as to the lawfulness of such a method of making known the objects and benefits of the contemplated undertaking. If such a method be considered lawful the disbursement of the funds necessary to pay therefor would seem to follow as an unavoidable sequence. But...