Martin v. Rothwell
| Decision Date | 26 February 1918 |
| Docket Number | 41-45. |
| Citation | 95 S.E. 189,81 W.Va. 681 |
| Parties | MARTIN v. ROTHWELL ET AL. |
| Court | West Virginia Supreme Court |
Submitted February 12, 1918.
Syllabus by the Court.
A subscription to the capital stock of a corporation subsequently to be formed, and not revoked before the organization thereof, is valid upon the acceptance thereof by such corporation after its formation and organization.
If said subscription is made upon the condition that certain things will be performed by the proposed corporation, such proposed corporation by the acceptance of said subscription undertakes to perform the conditions under which it is made.
The obligation of the parties to a contract is not determined by the recitals therein, or the preamble thereto, but such recitals or preamble may serve the purpose of limiting or defining such obligation where the extent thereof is by the obligatory terms of the contract uncertain, indefinite, or ambiguous.
Cases Certified from Circuit Court, Berkeley County.
Separate suits by C. E. Martin, trustee, against J. M. Rothwell and others. Demurrers to the declarations overruled, and cases certified. Judgments affirmed, and causes remanded.
S. W Walker, A. C. McIntire, and John H. Zirkle, all of Martinsburg, for plaintiff.
D. W Snyder, Jr., and H. H. Emmert, both of Martinsburg, for defendants.
The declarations in these cases aver that the respective defendants, by signing their names to the following paper pledged themselves as subscribers to the stock of the corporation thereafter formed under said agreement. The agreement and contract referred to is in the following language:
"Whereas, the Norwalk Motorcar Company, of Norwalk, Ohio, has expressed a willingness to remove its entire plant, patterns, designs, drawings, patents, patents applied for and to be applied for, good will and fixtures to Martinsburg, W. Va., and to reorganize its company by procuring a new charter under the laws of the state of West Virginia provided the citizens of Martinsburg will subscribe the sum of $75,000 for a contemplated preferred stock issue; and
Whereas, under the reorganization of said company the Norwalk Motorcar Company has agreed to accept as full compensation for its entire plant and improvements in motorcars and commercial trucks $100,000 of common stock of said company and of a total issue of stock of $137,500 common stock; that the said Norwalk Motorcar Company agrees to give from said capitalization one share of common stock for each two shares of preferred stock, and further in the organization of said company as aforesaid three out of seven of its board of directors shall be selected annually by the subscribers to said preferred stock, said preferred stock to bear 7 per cent. interest to be paid semiannually:
Now, therefore, we, the undersigned, do hereby bind ourselves, our heirs and assigns, for the amount opposite our names as our subscriptions to said preferred stock, said subscriptions not to be binding on us and each one of us until at least $50,000 of said preferred stock has been subscribed; and when said $50,000 preferred stock is so subscribed this subscription becomes operative and the organization of said company under the laws of West Virginia may proceed.
It is further understood between the subscribers and the said Norwalk Motorcar Company that the said $75,000 derived from the said preferred stock subscriptions is to be used as capital in the business of said company, and no part of same is to be expended on any stockholders of the present Norwalk Motorcar Company, and said expenditures on behalf of said company shall be so expended by the new board of directors of the new organized company three of which are to be named as aforesaid by the preferred stockholders.
Said subscription shall be paid as follows: 25 per cent. of the amount subscribed when $50,000 or more has been taken, the residue to be payable in four, eight and twelve months from that date; the subscriber to give good commercial paper for the deferred payments, with interest, or the same may be paid in cash."
The declarations each contain two special counts. In the first count the pleader attempts to allege that all of the things referred to in the two recital paragraphs of the above contract have been performed, as well as those things referred to in the last three paragraphs of the contract. The second count only avers the performance of the conditions and stipulations referred to in the last three paragraphs of the paper. In both counts it is averred that these subscriptions were accepted by the Norwalk Motorcar Company, and that the defendants thereby respectively became liable to pay the amounts which they set opposite their names.
It is insisted by the defendants on demurrer that all of the statements...
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