Page:Federal Reporter, 1st Series, Volume 7.djvu/798

 786 fedeeaIj reporter. �the Company filed with the secretary of state the annuai report required by Statute, in -which it was stated that the amount of capital paid in was $75,000; and also set fortli the names of the stockholdera and the number of shares held by each, the aggregate being 4,000 Bhares, which at $25 each would be $100,000. �H. M. Campbell ana Alfred Russell, for complainant. �C. A. Kent and F. A. Baker, for defendants. �Brown, D. J. That the capital stock of a corporation is a trust fund for the payment of its debts, and that the law implies a promise by the subscribers of stock to pay its par Talue, which in this instance was $25 par share, when called for, and that no subsequent release of their original contract or subscription by the corporation will avail against the claims of creditors, are propositions too clearly established to admit of question. But whether a court cannot only compel a subscriber to livo up to a bargain he bas made, but can make another bargain for him, and compel him to live up to that, is a different question. In the case under consideration it is clear that no actual fraud was intended. The novelty works found itself embarrassed for means, and resolved to raise money by increasing its capital stock. As its existing stock, however, was worth only two-thirds of its par value, it was obviously impossible to sell its new stock at par, since all the stock would stand upon an'equal footing and iuo onecould be found to pay a dollar for that which was worth but 66f cents. There was, theref ore, no reoourse but to issue new stock at its real value. AU the stockholders of the corporation having assented to this arrangement, it was evidently no fraud upon them, and the corporation itself would be estopped to ciaim more than the agreed price. Neither was it a fraud upon the existing creditors, since the assets of their debtor were increased by the amotint of money actually paid in, and, to that extent, they were benefited by the subscription. �It is, then, only as a fraud upon future creditors that excep- tion can be taken to the transaction. While the statute (Comp. Laws, § 2841) requires the capital stock of such cor- porations to be divided into sbares of $35 each, there is no ��� �