Dickerson v. Appleton

1. Corporations—Agreements Between Promoters—Consideration. An agreement by defendant to give plaintiff half the shares allotted to him in a proposed corporation was valid, and based on a valuable consideration, where plaintiff interested defendant in the publication of the book to be published by the corporation and introduced him to the compiler thereof, and engaged offices and collected various data for the enterprise 2. Corporations—Incorporation and Organization — Agreements Among-Promoters. Plaintiff, defendant, and others organized a corporation to publish an encyclopedia, and it was agreed that 51 per cent, of the stock should be issued to such others and the remainder to the business end of the management, represented by plaintiff and defendant; defendant agreeing to share half of this stock with plaintiff. The corporation was organized, and defendant, who was elected president thereof, transferred the results of the labor of himself, plaintiff, and the others to the corporation in consideration of the issuance to him of the entire capital stock, which he transferred in part to the other promoters under their prior agreements, but did not share his part of the stock with plaintiff. Held, plaintiff was entitled under their agreement to half of the stock issued to a defendant before the latter would be permitted to surrender his stock to the company. 3. Same—Issue of Certificates—Ownership of Shares. The fact that certificates were not issued for 220 shares of the entire capital stock issued to defendant did not affect his liability to plaintiff under their agreement, since defendant was nevertheless the owner of the stock as against the company. 4. Same—Agreement Among Promoters. Defendant’s liability to transfer half his shares to plaintiff under their agreement was not affected by plaintiff not being elected to the management of the concern as the parties had anticipated at the time. 5. Same—Transfer of Shares—Estoppel to Deny Transfer. Where the president of a corporation transferred to the corporation as assets the result of the labors of the promoters in consideration of the Issuance to him of the entire capital stock, in an action upon an agreement by such president to divide his share of the stock with a promoter, the corporation is estopped to deny that it issued the stock to its president for value. [Ed. Note.—For cases in point, see Cent. Dig. vol. 12, Corporations, § 454.]

Appeal from Special Term. Action by William T. Dickerson against Robert Appleton and others. From a judgment in favor of plaintiff, defendant appeals. Affirmed.