The opinion
BEATTY, C. J., concurring.
If the plaintiff has alleged facts constituting a cause of action against the defendants, I do not think his action is barred by the statute of limitations; that is to say, if he has pleaded an actionable fraud, I think he has alleged facts sufficient to excuse his failure to discover the fraud three years prior to the filing of his complaint.
But has he shown that he ever had a right of action
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His whole argument on this point is based upon the assumption that the certificate of stock issued to him for the one hundred shares mentioned in his complaint was void, and did not constitute him a stockholder of the corporation. This position is utterly unsupported, as is fully shown in the opinion of the court; and the only question is whether plaintiff has stated a cause of action independently of this unfounded assumption. He alleges that the defendants issued to themselves 24,750 shares of the stock of the corporation, out of a total of 25,000 shares, without paying any money therefor, and without the transfer of property of any pecuniary value; that is to say, he alleges that the only property transferred by the defendants to the corporation, in exchange for the stock so issued to themselves, was incumbered by debts exceeding in amount the value of the property, which debts the corporation was made to assume. He alleges that, notwithstanding the corporation got nothing for the stock, it was issued as fully paid stock, and so entered in the books of the corporation. He alleges that the defendants caused said stock to be listed on the exchange, and represented it to be fully paid stock—all for the purpose of deceiving investors; that he was thereby deceived, and induced to buy . the one hundred shares mentioned in his complaint. But he shows that his purchase was made
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nearly two years after the defendants put their stock on the market with the false representation that it was fully paid, and he does not show that he purchased from the defendants, or from either of them. The real question, therefore, presented by the pleadings, but nowhere discussed in the argument, is this: The stock of a corporation is divided into 25,000 shares; five persons, holding 250 shares, acting as directors of the corporation, issue to themselves the remaining 24,750 shares; they give nothing in exchange, but label the stock “fully paid,” and, for the purpose of making a market, represent that it is fully paid, or, in other words, that the corporation, on issuing the stock, received money or property in exchange equal to its par value. A stranger, believing this false representation, buys shares,—not from either of the five directors, but from another stranger,—and finds on investigation that he has become a member of a corporation which, instead of having a paid-up capital of $2,500,000, has only property incumbered for more than it is worth. Has he an action against the directors to recover the sum so paid to a stranger ? As this question has not been touched in the argument, it must be left undecided. Upon the case as presented, I concur in the judgment of affirmance.
Justice Harrison took no part in the decision of the foregoing case.