Geary Street, Park & Ocean Railroad v. Campbell

KERRIGAN, J.

These actions were brought to recover alleged unpaid subscriptions to the capital stock of plaintiff corporation. By stipulation of counsel the actions were tried together, and it was agreed that the evidence offered and received should apply equally to both cases. The appeals are by stipulation presented upon one bill of exceptions, and have been consolidated by order of this court.

[497]

They are brought here by George Campbell and Jean Campbell Eoot from judgments rendered against them on a stock call or assessment arising as follows: The Geary Street, Park and Ocean Eailroad Company was incorporated with a capitalization of one million dollars, divided into ten thousand shares of the par value of one hundred dollars each. On the twenty-fifth day of November, 1915, the board of directors of the corporation levied an “assessment and call” upon its capital stock. The assessment was levied for the purpose of paying certain obligations of the company. It amounted to the sum of $34 a share in all, and was therefore more than ten per cent of the capital stock. In an exhibit attached to the complaint the order of the board of directors levying the assessment is set forth, as are also certain recitals as to the indebtedness of the corporation, the issuance of the capital stock, and the declaration that the amount of $62.50 remains unpaid upon the original subscription to each share. The complaint further sets forth that an assessment or call for unpaid subscriptions in the sum of $34 will be required to raise the amount of indebtedness of the company. The resolution assessing the stock also appears therefrom. The complaint also shows that the directors of the company elected to waive proceedings leading up to a sale of the stock for nonpayment of the assessment, and decided to bring actions against the stockholders for the amount sued for.

At the time the assessment was levied the defendants herein were the owners of fifty shares of the capital stock of the company which they had inherited from their father. Upon their failure to pay the assessment these actions were brought against them by the corporation for one thousand seven hundred dollars each.

The complaint proceeds upon the theory that the stock was never fully paid up, and it is conceded that the action is one to recover upon unpaid subscriptions. The trial court found that there had been paid upon each share of the capital stock of plaintiff the sum of $37.50, and that the remainder of the subscription, $62.50, remained unpaid. Judgment went for plaintiff, and the defendants appeal.