overvaluation of property transferred to the corporation in payment of the shares, the transaction, unless void for the same reason, is binding so long as it is not impeached by the corporation or its assignee, and it can be impeached only for fraud upon the corporations." Coffin v. Ransdell, 110 Ind. 417, 11 N. E. 20. In each of the two cases just referred to, there was a charge that the property received by the corporation in payment of stock was taken at an overvaluation. In a later case decided by the supreme court of Indiana, the opinion is concluded in these words: "In disposing of this case, we think it proper to say that it is apparent that the issues were not broad enough to permit the introduction of the evidence by which the appellants sought to establish their case. The case made in the pleadings depended entirely upon the allegations of noncollections of the capital stock of the company. The order made by the board of directors introduced by the plaintiffs, and the contract between the water company and Comeggs & Lewis, given in evidence by defendants, show that the full amount of the capital stock had been paid to the satisfaction of the contracting parties. In the well-considered case of Coffin v. Ransdell, 110 Ind. 417, 11 N. E. 20, it was held by this court that such payment could only be impeached for fraud. No suggestion of fraud is made in the pleadings, and, without making charge of fraud in the complaints, the plaintiffs could introduce no evidence to show or tending to show fraud, as a basis of recovery." Clow v. Brown (Ind. Sup.) 31 N. E. 362. In a case somewhat like the one before us, the supreme court of Maryland has said: "So long as the transaction stands unimpeached for fraud, courts will treat as a payment that which the parties themselves have agreed shall be a payment; and this, too, in cases where the rights of creditors are involved." Brant v. Ehlen, 59 Md. 1. Mr. Cook says: "It is now well settled that, in order to invalidate an issue of stock which is issued for property taken at an overvaluation, it must be shown, not only that there was an overvaluation, but also that such overvaluation was intentional, and consequently fraudulent." Cook, Stocks & S. §§ 35, 47. Mr. Thompson, after considering the question of paying for shares in property through several sections of his work on Liability of Stockholders, concludes as follows: "The whole discussion resolves itself into the following conclusions: A corporation may take in payment of its shares any property which it may lawfully purchase. Such a transaction is not ultra vires or void, but is valid and binding upon the original sharetakers, and upon the corporations, unless it is rescinded or set aside for fraud. While such a contract stands unimpeached, the courts, even where the rights of creditors are involved, will treat that as payment which the parties have agreed shall be pay ment." Thomp. Liab. Stockh. § 134. Mr. Taylor, after announcing as well recognized the rule that property may be taken in payment for stock, continues: "Such transactions may be opened to show fraud, and, if the property received is grossly unequal in value to the par value of the shares, the shareholder who received the shares originally, or his subsequent transferees with notice of the circumstances, may be compelled to make up the difference in values in a suit brought by or on behalf of persons injured thereby." Tayl. Priv. Corp. § 545. Mr. Spelling says that such transactions "have been upheld against creditors only where the contract for the rendition of services or the purchase of property payable in stock has been made in good faith, and the property taken in payment has been put in at a fair bona fide valuation. Such payment discharges a party from his liability to creditors upon his subscription, though it be excessive, provided that, in fixing and accepting it, the agents of the company have acted in good faith." 2 Spel. Priv. Corp. § 792. Gogebic Invest. Co. v. Iron Chief Min. Co. is a case in which a creditor of an insolvent corporation sued certain of its stockholders to recover unpaid stock, upon the allegations that they had transferred to the corporation certain mining property at 10 times its real value, and obtained therefor, full-paid stock. Hearing the case on demurrer, the court said: "In an action against the stockholders of a corporation to compel them to contribute to the payment of the debts of the insolvent corporation, it is only necessary, in order to make out a prima facie case, to establish the fact that the stockholder has not in good faith paid the par value of his stock to the corporation." In the same case it is said: "The allegations of the complaint, which are admitted to be true by the demurrer, show conclusively that the stockholders (defendants) have not, as between themselves and the creditors, paid in full for their stock, and are therefore liable to make further payment, for the benefit of the plaintiff, as a creditor of the corporation. This is all that is necessary, under our statute or at common law, to make a case against the stockholders of unpaid stock in favor of a creditor of the insolvent corporation." 78 Wis. 427, 47 N. W. 726. Similar relief was sought in the case of Elyton Land Co. v. Birmingham Warehouse & Elevator Co. "The statements of fact in the bill support the conclusion therein averred, that the transaction by which payment for the stock was attempted to be made was merely colorable; in other words, that it was not really a payment, but had only the outward appearance, without the substance, of a payment. Such being the case, the individual defendants are still liable on their stock subscriptions, to the extent that the attempted payment falls short of a bona fide compliance with the terms of the contract; and the allegations as to excessive overvaluation of property in question were sufficient, under the rules above stated." 92 Ala. 407, 9 South. 129. The late case of Lloyd v. Preston is one in which creditors of an insolvent corporation sought to compel a stockholder to pay his subscription. In the original bill, complainants alleged that no part of stock subscription had been paid. Defense was made, on the grounds, as claimed in the answer, that full payment had been made by the transfer of property. Thereupon an amended bill was filed, alleging collusion between the directors of the corporation and the defendant Harper, and that the property transferred by Harper to the company was not worth one "fiftieth part" of the sum at which he sold it, and that he knew that fact at the time. The hurtful part of the amended bill was denied by Harper. The circuit court, hearing the case upon these pleadings and proof, found "that the entire organization was grossly fraudulent, from first to last, without a single honest incident or redeeming feature." Mr. Justice Shiras, speaking for the supreme court, on appeal, said: "It having been found, on convincing evidence, that the overvaluation of the property transferred to the railway company by Harper, in pretended payment of the subscriptions to capital stock, was so gross and obvious as, in connection with the other facts in the case, to clearly establish a case of fraud, and to entitle bona fide creditors to enforce actual payment by the subscribers, it only remains to consider the effect of the defenses set up." 146 U. S. 642, 13 Sup. Ct. 131. The foregoing quotations from text writers and adjudicated cases abundantly sustain the proposition that the transaction whereby Lambie obtained full-paid stock as the price of property conveyed must stand until impeached by appropriate allegation and proof; and that, until that is done, no liability can be fixed upon a holder of that stock for further payment. No such liability can arise by presumption from the mere fact that property, instead of money, was used in paying for the stock. This is conclusive of the whole case, for all of the defendants are holders of parts of the Lambie stock, all of which, upon this record, must be treated as full paid and nonassessable, whether purchased by the present holders from the corporation, one of his transferees, or from him directly. In the hands of Lambie it would be so regarded. In the hands of others, after him, whether donor or purchaser, it is at least upon as high a plane. Let the decree be affirmed. END OF CASES IN VOL. 28. INDEX. trators." On injunction bond, see "Injunction." To set aside fraudulent conveyances, see Where a person contracts to pay debts of an- 998. An agent who receives a sum of money from Where one person covenants to pay the debts Where one person merely agrees to "save A plaintiff declaring in assumpsit for goods ADVERSE POSSESSION. The possession of heirs is not adverse to a One who purchases the interest of a dowress, A widow whose dower has never been as- exclusive right under a deed, is adverse to his The registration of a deed under which a ten- Where an owner builds over the line by mis- Propriety of instruction as to what must be Possession by husband and wife construed to (1105) Evidence examined and held sufficient to show Question whether the possession of one un- Right of court to presume the existence of a - Question whether one of two adjoining land- Sufficiency of evidence to show adverse pos- Time of accrual of right of action for land the right of one defendant to part of the land No appeal lies from an order of the United Where affidavit on appeal is not filed within Where the affidavit does not identify the judg- Notice. Where a city is not required to give bond on The court of civil appeals can determine wheth- Notice of appeal cannot be waived.-Western Where the bond identifies the judgment, it An appeal bond, filed in a justice court, exe A bond to the St. Louis court of appeals in- Where the bond is insufficient on its face, The omission of the number of the case and Error in dismissing an appeal from a justice The appeal of a nonresident in the trial coun- An affidavit stating that appellant is unable A bond which recites that "we acknowledge Where, pending an action on a note for $80, A guardian ad litem and the next friend of An administrator can appeal from an order as Where a petition for rehearing is pending in A judgment of the court of civil appeals, in Where judgment in garnishment is against Appeal from inferior courts. On appeal from a justice's judgment, an an- - On appeal from a justice's judgment, an an- |