Corporations – Stockholders – Effect of State Constitutional Provisions on Liabilty to Creditors for Unpaid Subscriptions
Basset and Company, an Oklahoma corporation, issued stock to defendant for which defendant never paid. The sum due was carried on the corporate books as “subscriptions receivable.” The corporation became bankrupt and the trustee brought suit in the federal district court to recover the amount due on the subscriptions. Held, judgment for the defendant. Under the Oklahoma Constitution, where stock is issued for consideration which is less than par value, the issue is void. The stock certificate cannot serve as a consideration to support the would-be stockholder’s promise to pay for the stock, and no liability attaches to the stockholder except where his unfulfilled promise works a fraud upon innocent third persons. Stone v. Hudgens, (D. C. Okla. 1955) 129 F. Supp. 273.