Page:North Dakota Reports (vol. 48).pdf/576

 Hunter, who was in a military camp at the time, was consulted, and co- operated in the organization of the new corporation. At this time a memorandum agreement in triplicate was entered into between Quirk, Follett, and Croil Hunter, binding them by mutual promises to form a new corporation for the purpose indicated in the agreement. The agreement recites that the parties had just learned of the expiration of the charter and of their obligations under § 4567 of the Compiled Laws, following which it contains these recitals:

“And whereas the assets of said defunct corporation consists of miscellaneous stock such as is usually. carried by a wholesale grocery, and various notes and accounts, all of which could be sold and moneys collected only at some sacrifice and considerable expense by the ordinary process of liquidation; and whereas the parties hereto are desirous of avoiding this sacrifice for themselves and all other stockholders who are entitled to participate in the proceeds of the liquidation: Now, therefore, the parties hereto mutually agree one with the other to form a corporation for the purpose of purchasing the assets of the defunct corporation, and - agree to accept and take as the name of the corporation to be formed the same name as the defunct corporation, to wit, Fargo Mercantile Co., and for the protection of such stockholders as are not parties to this instrument, to pay for the assets of said concern, including mercantile stock, notes and accounts, etc., as nearly as may be the true and full value thereof as of the date of the purchase by the proposed corporation.”

The articles of incorporation of the Fargo Mercantile Co. dated from August 9, 1918. The property and assets of the dissolved corporation were appraised by appraisers selected by the defendants for the purpose, S. D. Lyon and E. G. Gearey. The appraised value was fixed at $540,332.87. To this amount the defendants, Quirk and Follett, arbitrarily added, in round numbers, $29,000. The new corporation made a written offer to purchase the assets for $569,416.63, to be paid $258,750 in cash and by assuming and guaranteeing outstanding debts amounting to $310,666.63. This offer was accepted by the directors of the dissolved corporation, and settlement was made by delivery of the stock of the new corporation, except that no stock was delivered to the Langers or to Hi. F. Hunter for their respective interests in the old corporation. Settlement with Hunter was made by means of money advanced by T. A. Quirk, and it was proposed likewise to settle for the Langer shares with money advanced by C. O. Follett. The Langers had not been advised