Walter v. Merced Academy Ass'n

THE COURT.

—Heretofore the plaintiff had recovered judgment against the defendant corporation in a foreclosure suit, and, after sale of the premises involved, a deficiency judgment was duly docketed against said corporation for five thousand five hundred and eighty-seven dollars and twenty-five cents. Plaintiff prosecuted this action against the appellants to ascertain the amount due from each of them on said deficiency judgment as owliers and holders of the stock of the said defendant corporation, and to obtain judgment and execution for the amount of her claim against each of them, not to exceed the amount that should be found due on their several subscriptions-to the said stock of said corporation. The case was tried without a jury, and from a judgment for plaintiff and an order denying a new trial the defendant stockholders above named appeal.

It appears from the pleadings and evidence that the MercedAcademy Association was incorporated in 1890, with a capital stock of twenty-five thousand dollars, divided into two hundred and fifty shares of the par value of one hundred dollars each. Its purposes, as stated in its articles of incorporation, were “to-buy or acquire the Merced academy property .... situated in the city of Merced .... together with the academy building and furniture and improvements connected therewith; and" to own, use, improve, mortgage, lease, sell, and deal with said

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property, and to borrow money thereon and to carry on a school or boarding-house, or to lease the same for said purpose or any other purpose.” All the appellants were named in the articles as stockholders, and Applegate, Lyons, Simonson, ■ Law, and Landrum were mentioned as directors for the first year, and to the articles these fire persons mentioned subscribed their names and duly acknowledged the execution of the same. Some time prior to incorporation the appellants had signed a subscription agreement in which the objects of the proposed corporation were stated as follows: “To acquire the Merced academy property by purchase or otherwise and conduct thereon a school, or to use the said property for such other purpose or purposes as the stockholders of said corporation miy determine.” Soon after incorporation certificates of stock were issued, and each of the appellants, excepting those who signed the articles, received one of these certificates representing a stated number of shares and signed a receipt therefor, which receipt, after describing the certificate delivered, contained the following language: "Received the above certificate subject to the articles of incorporation and by-laws of the company.” The appellants retained these certificates in their possession from 1890, when they received them, down to the time of the trial of this action in 1897, holding themselves in readiness, as it is admitted, to share in the dividends of the concern should any accrue. Appellants seek to avoid liability as stockholders and contend that they are not stockholders in fact for the reason of variance in the purposes of incorporation as set forth in the subscription agreement and as declared in the articles of incorporation,' and to sustain this position they cite