Swatara R. v. McKim

23 F. Cas. 525, 11 Hunt Mer. Mag. 363

Opinion

THE COURT

(TANEY, Circuit Justice,)

decided that each stockholder must be charged with notice of the company’s charter, which authorized only payments of stock in money, and. therefore, as the said agreement to receive depreciated securities was illegal and void, it was incompetent to the parties to the illegal agreement, to set it up in bar of an action brought against them for the stock subscribed; and if the said parties would be precluded from setting up said agreement, neither could any other bona fide subscriber of stock rely upon the said illegal agreement for the purpose of annulling his own subscription. It is proper to state that the articles of subscription, signed by all the stockholders, purported, on their face, to be payable in dollars, but THE COURT decided that whether the collateral agreement to pay in depreciated securities, was in writing or by parol, it was equally inadmissible as a defence.