State ex rel. Attorney Gen. v. Wood

• Decision Date: 31 October 1884
• Citation: 84 Mo. 378
• Parties: STATE ex rel ATTORNEY GENERAL, Appellant, v. WOOD et al.
• Court: Missouri Supreme Court

84 Mo. 378

STATE ex rel ATTORNEY GENERAL, Appellant,

v.WOOD et al.

Supreme Court of Missouri.

October Term, 1884.

1. Corporations.

A substantial compliance with conditions attached to a grant of corporate franchises is all that is required.

2. Capital Stock.

The statutory requirement that one-half of the capital stock “has been actually paid up in lawful money of the United States,” is substantially complied with if the corporation has property whose market value is greater than the par value of the stock.

3. Quo Warranto: EVIDENCE.

In quo warranto to forfeit the franchises of a private corporation, the court may consider testimony tending to show that one of the corporators procured the commencement of the proceeding in bad faith and for his private purposes. ^a1

Appeal from St. Louis Court of Appeals.

AFFIRMED

Frank K. Ryan and Smith & Krauthoff for appellant.

(1) The capital stock being a trust fund (72 Mo. 424 and 434; 78 Mo. 482) the statutory requirements as to amount, time, and manner of payment must be strictly obeyed and are conditions precedent. King v. Elliott, 5 S. & M. 428, 442; Turnpike Co. v. McKean, 11 Johns. 98. These requirements are dictated by sound policy and cannot be evaded. Schutz v. R. R., 9 Mich. 269; Turnpike Co. v. Henderson, 8 Serg. & R. 217; Wood v. R. R., 32 Ga. 273. (2) The requirement of the statute that at least one-half of the capital stock shall be paid “in lawful money of the United States” is constitutional. (3) At the period of time to which these proceedings are addressed (and indeed up to date), no portion of the capital stock of the Wood Medicine Company was paid in whole or in part, in either money or property. The property set up as substantial payment for the stock, was not attempted to be and could not be conveyed to the Wood Medicine Company until after it was fully incorporated, while the law requires this one-half payment as a condition of incorporation. The chain of conveyances for the transfer of this alleged property is each void on its face. The subject matter thereof and the covenants therein were not vendible or subject to such transfer. Case of Skinner v. Oakes, 6 Ct. of App. 45. (4) C. Maguire was a bankrupt and could not make the transfer.

John G. Chandler for respondents.

(1) The state asked no instructions and none were given for the defendants. The finding of facts was for defendant and no point of law was saved for review by the appellate court. Quo warranto proceedings are strictly at law, and, therefore, can only be reviewed according to the methods of the common law. High on Ex. Rem., sec. 619; State v. Vail, 53 Mo. 97; State v. Townsley, 56 Mo. 107. (2) If the statute could be construed (which it cannot) as directing one-half of the stock to be paid in lawful money of the United States, it would in that particular be directory only and not mandatory. Sedgwick on Stat. and Cons. Law, 368, 369, 370, 377, 378, 380; Cape Girardeau v. Riley, 52 Mo. 424; West v. Ross, 53 Mo. 350; St. Louis, etc., v. Sparks, 10 Mo. 177; State v. Howard, 41 Mo. 247; State v. Muir, 20 Mo. 303; Hicks v. Chouteau, 12 Mo. 341; Price v. Woodford, 43 Mo. 247. (3) Payment of fifty per cent. of the stock in money was not a condition precedent to the formation of the corporation. R. S., secs. 926, 977, 928, 708; Liebke v. Knapp, 79 Mo. 22. (4) If payment of fifty per cent. of the stock was a condition precedent to the formation of the corporation, the condition was substantially complied with and no more than this was necessary. People v. Turnpike Co., 23 Wend. 193; Thompson v. People, 23 Wend. 537; Livingston v. Livingston, 15 Wend. 294; 2 Coke on Lit. 1 n. (5) The prosecution being instituted by private persons for private ends, and no public purpose being subserved thereby, is not maintainable. Ang. & Ames on Corp., secs. 742, 746; High on Ex. Rem., sec. 652; People v. R. R., 88 Ill. 537; 2 Dillon on Mun. Corp., sec. 899.

NORTON, J.

This proceeding was instituted in the St. Louis circuit court on behalf of the state on the relation of the attorney general, in which a forfeiture of the franchises of the Wood Medicine Company, a corporation, it being alleged as the ground therefor, that the statement in the articles of incorporation, that the stock had been subscribed and paid for in lawful money of the United States was false; that none of...