Northern Trust Co. v. Columbia Straw-Paper Co.
| Decision Date | 07 July 1896 |
| Citation | 75 F. 936 |
| Parties | NORTHERN TRUST CO. et al. v. COLUMBIA STRAW-PAPER CO. et al. |
| Court | U.S. District Court — Northern District of Illinois |
Dupee Judah, Willard & Wolf, for complainants.
Herrick Allen, Boyesen & Martin, for defendant Columbia Straw-Paper Co.
John S Cooper and Otto Gresham, for remaining defendants.
In this case the defendant corporation contracted with Stein whereby, for certain specified properties, which he caused to be transferred to that company, all or nearly all of the stock of that company was exchanged. Stein afterwards delivered, or caused to be delivered, it is said, a large portion of this stock to third parties. There was no express agreement by these parties to pay anything to the Columbia Straw-Paper Company in the way of a stock subscription. If the complaint of these defendants be well founded, it would simply mean either that the stock should be turned back to Stein or to the company for their benefit, or treated as void. There is no basis in this case for any ruling that the holders of the stock referred to sustained the relation of debtor to the Columbia Straw-Paper Company for the price of that stock. This is not a case where a stock liability was incurred by certain persons, and afterwards gotten rid of in some way without payment. It might be possible to say in this case that certain of the persons to whom Stein delivered the stock were not entitled to it, as against the rights of other persons to whom he delivered other portions of stock, but there is no basis for declaring an indebtedness by these stockholders to the Columbia Straw-Paper Company. The Columbia Straw-Paper Company parted with its capital stock for what was agreed to be the value of the stock. The property which Stein contracted to give, and which he did give, or caused to be given, to the Columbia Straw-Paper Company, was what that company agreed to accept for its stock. In that transaction the Columbia Straw-Paper Company was in no way wronged. It can have no action to recover on the theory that the stock has not been paid for, nor can any discontented stockholder assert such a right for the Columbia Straw-Paper Company as against any other stockholder. A quarrel between stockholders concerning the beneficial ownership of stock which has been paid for is one thing. A controversy between a corporation and a stockholder who has not paid such corporation what is due from him for his stock, is another. The case might be different here if the rights of creditors were involved. I do not say that it would be, but under the decisions of some courts it might be.
It is strongly urged here that the property which the company got for its stock under the Stein contract was not a fair equivalent for the stock, estimating the latter at its par value. As the case has turned out, and in the light of what happened, this position is doubtless correct; but when the contract was made, and in view of the...
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Meyer v. Ruby Trust Mining & Milling Company
... ... Windsor, 78 Iowa 193; Ten Eyck v. Railroad, 114 ... Mich. 494; Northern Trust Co. v. Columbia Straw Paper ... Co., 75 F. 936; Woolfork v. January, 131 Mo ... 620; ... ...
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... ... Hill v. Coal & Mining ... Co., 124 Mo. 166; Dickerman v. Northern T. Co., ... 176 U.S. 121; 1 Cook on Corporations, sec. 30, p. 93; sec ... 22; Bank v ... Gustin, etc., Co., 42 Minn. 327; Northern Trust Co ... v. Columbia, 75 F. 936; Wells v. Green Bay Co., ... 90 Wis ... ...
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