Downie v. Hoover

Wisconsin Supreme Court

Downie v. Hoover

12 Wis. 174

DecidedJune 15, 1860

StatusPublished

This text of 12 Wis. 174 (Downie v. Hoover) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Downie v. Hoover, 12 Wis. 174 (Wis. 1860).

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Opinion

By the Gourt,

Paise, J.

Tbe single question presented on this appeal is, whether a railroad company, in carrying out tbe enterprise authorized by its charter, has any power to assign its stock subscriptions. We think it has tbe power. A stock subscription is nothing but a contract, by which tbe subscriber is bound to pay tbe company certain amounts. It would clearly be assignable as between indi-viduáis, and we can see no reason why it should not, in tbe case of a corporation, acting in execution of tbe powers conferred by its charter.

Tbe fact that a company may abuse its power, and make contracts ruinous to itself, and to tbe value of its stock, does not seem to be a sufficient reason for denying tbe power. For they may, undoubtedly, do this whether this power of assignment exists or not. They may make extravagant contracts for materials, for land, and for labor in building tbe road, and thus make their stock worthless, as often happens. They become insolvent, receivers’ are appointed, who may compel tbe payment of unpaid stock subscriptions for tbe benefit of creditors, created by these extravagant and ruinous contracts.

[176]*176The fact, therefore, that a company may ruin itself by indiscreet contracts, if such an assignment is allowed, is no reason against tbe power; for it may ruin itself by sucb contracts without such a power.

At all events, even though it might be a reason for the legislature to impose a restriction, it is no reason for the court, where the charter contains no such restriction, but gives the general power to make all contracts which the convenience or interest of the company may require, to deny the power to make this particular contract. The reasoning in the case of Clark vs. Farrington, decided at this term (11 Wis., 306), is appEcable to the question. The order of the court below sustaining the demurrer, is reversed, with costs, and the cause remanded for further proceedings.

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By the Gourt,

Paise, J.

Tbe single question presented on this appeal is, whether a railroad company, in carrying out tbe enterprise authorized by its charter, has any power to assign its stock subscriptions. We think it has tbe power. A stock subscription is nothing but a contract, by which tbe subscriber is bound to pay tbe company certain amounts. It would clearly be assignable as between indi-viduáis, and we can see no reason why it should not, in tbe case of a corporation, acting in execution of tbe powers conferred by its charter.

Tbe fact that a company may abuse its power, and make contracts ruinous to itself, and to tbe value of its stock, does not seem to be a sufficient reason for denying tbe power. For they may, undoubtedly, do this whether this power of assignment exists or not. They may make extravagant contracts for materials, for land, and for labor in building tbe road, and thus make their stock worthless, as often happens. They become insolvent, receivers’ are appointed, who may compel tbe payment of unpaid stock subscriptions for tbe benefit of creditors, created by these extravagant and ruinous contracts.

[176]*176The fact, therefore, that a company may ruin itself by indiscreet contracts, if such an assignment is allowed, is no reason against tbe power; for it may ruin itself by sucb contracts without such a power.

At all events, even though it might be a reason for the legislature to impose a restriction, it is no reason for the court, where the charter contains no such restriction, but gives the general power to make all contracts which the convenience or interest of the company may require, to deny the power to make this particular contract. The reasoning in the case of Clark vs. Farrington, decided at this term (11 Wis., 306), is appEcable to the question. The order of the court below sustaining the demurrer, is reversed, with costs, and the cause remanded for further proceedings.

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12 Wis. 174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/downie-v-hoover-wis-1860.

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