Beard, Justice.
The plaintiff in error, who was plaintiff below, brought this action against the defendant in error, alleging in substance, so far as necessary to an understanding of the questions here presented, that Wyoming Land and Irrigation Company is a Wyoming corporation organized on March 11, 1907, with an authorized capital stock of one million dollars, divided into one million shares of the par value of one dollar each. That on the same day defendant Rohrer procured from the State Engineer a permit to appropriate the waters of Paint Rock Creek and its tributaries for the’ irrigation of forty-nine thousand three hundred and seventeen acres of land in Big Horn County. That thereafter Rohrer offered to the board of directors of said company to transfer to said company said permit to appropriate said waters in consideration of the delivery to him of the full amount of the capital stock of said company. That at the time of said offer both Rohrer and each member of the board of directors of said company knew that said water permit was not worth one million dollars, nor anything like said sum, but nevertheless said board of directors accepted said offer and issued to Rohrer the whole of the capital stock of said company as full paid and non-assessable in consideration of the assignment to said company of. said [314]*314water permit. That said transaction was put through for the purpose of defeating any claim of future creditors of the company against the holders of said stock and as to them was fraudulent in law and void. That said water permit was in fact valueless. That in 1910 the company became indebted to one Rathbone and in 1913 R'athbone recovered a judgment for $218.00 against the company and caused execution to be issued thereon, which was returned “No property found”; and that the company is insolvent. That said judgment was afterwards assigned to plaintiff and is unpaid. That Rohrer is still the owner of more than fifty thousand shares of said stock. That said stock is not fully paid and non-assessable.
The defendants answered and, in substance, denied that at the time the offer of Rohrer was made and accepted that either he or any member of the board of directors of the company knew that said permit was not of the value of one million dollars. Averred that at that time each of them believed that an irrigation system could be constructed to utilize said appropriation of water, and believed that water rights for lands described in said permit could be sold to settlers at a profit to the company of more than a million dollars, and that said board in good faith valued said permit at one million dollars on the basis of profits it believed could be realized thereon. That the stock was issued to Rohrer without intent to defraud any one or to defeat the claim of any creditor of the company either present or future. That it had never issued any statement or report in which said stock was stated or reported to be issued for cash. That said indebtedness was incurred in 1912, and that prior thereto plaintiff’s assignor was informed and well knew that the whole of said stock had been issued as full paid in consideration of said permit. That prior to the incurring of said indebtedness the president and a majority of the board of directors of the company had filed in the office of the register of deeds in the county where the business of the company was carried on a certificate stating that the [315]*315whole of the capital stock of the company had been issued for property.
A general demurrer was filed to the answer, which was overruled and plaintiff elected to stand by his demurrer, whereupon the court rendered judgment for defendant; and plaintiff brings error.
In this case it is the contention of plaintiff that the stock received by the defendant, Rohrer, is not full paid stock and that by the terms of the statute he is liable to plaintiff. The statute upon which he relies is as follows: “All stockholders of every company incorporated under the provisions of this chapter shall be severally and individually liable to the creditors of the company in which they are stockholders to the amount of unpaid assessments on capital stock held by them, respectively, and to no other or further amount, for all debts and contracts made by such company, until the whole amount of assessments on capital stock, fixed and limited by the directors, shall be paid in.” * * * * (Sec. 3988, Comp. Stat. 1910.) “The directors of such company may purchase mines, manufactories and other property necessary for their business, and issue stock to the amount of the value thereof in payment therefor, and the stock so issued shall be declared and taken to be full stock, and not liable to any further calls, neither shall the holder thereof be liable to any further payments under the provisions of Secs. 3981 and 3988, but in all statements and reports of the company this stock shall not be stated or reported as being issued for cash paid into the company, but shall be reoorted in this respect according to the facts.” (Sec. 3980.) Section 3981, referred to, provides that the directors may call on and demand from the stockholders the sums subscribed for stock from time to time. Section 3990 requires the president and a majority of the directors within thirty days after the payment of the last instalment of the capital stock to make a certificate stating the amount of the capital so paid in, and to record the same in the office of the register of deeds of the county wherein the business of the company is carried on.
[316]*316Plaintiff contends that as the answer alleges only that the property received by the company in exchange for the whole amount of its capital stock was in good faith estimated by the directors to be equal to the par value of the stock, but fails to allege that it was of that value, constitutes no defense to the action, and that if the property was- overvalued in fact the stockholder is liable to the extent of the difference between its actual value and the par value of the stock received therefor. That is, he contends for what is called the “true-value” rule; while defendants insist that the rule called the “good-faith” rule is the one contemplated by our statutes. Each of these rules is supported by respectable authority, and to attempt to review the cases would unnecessarily extend our opinion and would be of little value, as they are easily accessible to the profession. (Ann. Cas. 1915A (35 A. & E. Ann. Cases) 1269; R. C. L., Sec. 342; 42 L. R. A. 593; State Trust Co. v. Turner, 111 La. 664, and cases cited in the opinion.) The question we think must be determined by our statute, which expressly authorizes the issuance of stock in payment for property to its value. That value must necessarily be fixed by the parties at the time of the transaction, it being the reasonable value of the property at that time which must control, and not what it may prove to be worth at some future time. And if in their judgment in the exercise of good faith and reasonable “business sense” (as said in some of the cases) the value of the property is equal to the par value of the stock for which it is exchanged, then by the terms of the statute it shall be declared and taken to be full paid stock and not liable to any further calls, nor shall the holder be liable to further payment either to the company or to creditors of the company.
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Beard, Justice.
The plaintiff in error, who was plaintiff below, brought this action against the defendant in error, alleging in substance, so far as necessary to an understanding of the questions here presented, that Wyoming Land and Irrigation Company is a Wyoming corporation organized on March 11, 1907, with an authorized capital stock of one million dollars, divided into one million shares of the par value of one dollar each. That on the same day defendant Rohrer procured from the State Engineer a permit to appropriate the waters of Paint Rock Creek and its tributaries for the’ irrigation of forty-nine thousand three hundred and seventeen acres of land in Big Horn County. That thereafter Rohrer offered to the board of directors of said company to transfer to said company said permit to appropriate said waters in consideration of the delivery to him of the full amount of the capital stock of said company. That at the time of said offer both Rohrer and each member of the board of directors of said company knew that said water permit was not worth one million dollars, nor anything like said sum, but nevertheless said board of directors accepted said offer and issued to Rohrer the whole of the capital stock of said company as full paid and non-assessable in consideration of the assignment to said company of. said [314]*314water permit. That said transaction was put through for the purpose of defeating any claim of future creditors of the company against the holders of said stock and as to them was fraudulent in law and void. That said water permit was in fact valueless. That in 1910 the company became indebted to one Rathbone and in 1913 R'athbone recovered a judgment for $218.00 against the company and caused execution to be issued thereon, which was returned “No property found”; and that the company is insolvent. That said judgment was afterwards assigned to plaintiff and is unpaid. That Rohrer is still the owner of more than fifty thousand shares of said stock. That said stock is not fully paid and non-assessable.
The defendants answered and, in substance, denied that at the time the offer of Rohrer was made and accepted that either he or any member of the board of directors of the company knew that said permit was not of the value of one million dollars. Averred that at that time each of them believed that an irrigation system could be constructed to utilize said appropriation of water, and believed that water rights for lands described in said permit could be sold to settlers at a profit to the company of more than a million dollars, and that said board in good faith valued said permit at one million dollars on the basis of profits it believed could be realized thereon. That the stock was issued to Rohrer without intent to defraud any one or to defeat the claim of any creditor of the company either present or future. That it had never issued any statement or report in which said stock was stated or reported to be issued for cash. That said indebtedness was incurred in 1912, and that prior thereto plaintiff’s assignor was informed and well knew that the whole of said stock had been issued as full paid in consideration of said permit. That prior to the incurring of said indebtedness the president and a majority of the board of directors of the company had filed in the office of the register of deeds in the county where the business of the company was carried on a certificate stating that the [315]*315whole of the capital stock of the company had been issued for property.
A general demurrer was filed to the answer, which was overruled and plaintiff elected to stand by his demurrer, whereupon the court rendered judgment for defendant; and plaintiff brings error.
In this case it is the contention of plaintiff that the stock received by the defendant, Rohrer, is not full paid stock and that by the terms of the statute he is liable to plaintiff. The statute upon which he relies is as follows: “All stockholders of every company incorporated under the provisions of this chapter shall be severally and individually liable to the creditors of the company in which they are stockholders to the amount of unpaid assessments on capital stock held by them, respectively, and to no other or further amount, for all debts and contracts made by such company, until the whole amount of assessments on capital stock, fixed and limited by the directors, shall be paid in.” * * * * (Sec. 3988, Comp. Stat. 1910.) “The directors of such company may purchase mines, manufactories and other property necessary for their business, and issue stock to the amount of the value thereof in payment therefor, and the stock so issued shall be declared and taken to be full stock, and not liable to any further calls, neither shall the holder thereof be liable to any further payments under the provisions of Secs. 3981 and 3988, but in all statements and reports of the company this stock shall not be stated or reported as being issued for cash paid into the company, but shall be reoorted in this respect according to the facts.” (Sec. 3980.) Section 3981, referred to, provides that the directors may call on and demand from the stockholders the sums subscribed for stock from time to time. Section 3990 requires the president and a majority of the directors within thirty days after the payment of the last instalment of the capital stock to make a certificate stating the amount of the capital so paid in, and to record the same in the office of the register of deeds of the county wherein the business of the company is carried on.
[316]*316Plaintiff contends that as the answer alleges only that the property received by the company in exchange for the whole amount of its capital stock was in good faith estimated by the directors to be equal to the par value of the stock, but fails to allege that it was of that value, constitutes no defense to the action, and that if the property was- overvalued in fact the stockholder is liable to the extent of the difference between its actual value and the par value of the stock received therefor. That is, he contends for what is called the “true-value” rule; while defendants insist that the rule called the “good-faith” rule is the one contemplated by our statutes. Each of these rules is supported by respectable authority, and to attempt to review the cases would unnecessarily extend our opinion and would be of little value, as they are easily accessible to the profession. (Ann. Cas. 1915A (35 A. & E. Ann. Cases) 1269; R. C. L., Sec. 342; 42 L. R. A. 593; State Trust Co. v. Turner, 111 La. 664, and cases cited in the opinion.) The question we think must be determined by our statute, which expressly authorizes the issuance of stock in payment for property to its value. That value must necessarily be fixed by the parties at the time of the transaction, it being the reasonable value of the property at that time which must control, and not what it may prove to be worth at some future time. And if in their judgment in the exercise of good faith and reasonable “business sense” (as said in some of the cases) the value of the property is equal to the par value of the stock for which it is exchanged, then by the terms of the statute it shall be declared and taken to be full paid stock and not liable to any further calls, nor shall the holder be liable to further payment either to the company or to creditors of the company. On the other hand, if, as alleged in the petition, the transaction was put through for the purpose of defeating any claim of future creditors of the company against stockholders and that the permit Was in fact valueless, of was over-valued for such fraudulent purpose, the stockholdér would be liable unless relieved from liability on other grounds. In this case by their answer de[317]*317fendants deny that said stock was issued for said permit with the intent to injure or defraud any person,.or to defeat the claim of any creditor of the company, present or future. D'eny that the permit is of no value; but, without a specific allegation that it was of the par value of the stock, allege that the board of. directors in good faith valued it at that amount. Whether the transaction was had for a fraudulent purpose, or whether the board acted in good faith in, an honest belief and in the exercise of reasonable business judgment in so estimating the value of the permit, or what its value in fact was are questions of fact which cannot be determined on the demurrer.
It is also alleged in the answer that plaintiff’s assignor had at the time the indebtedness was contracted full knowledge of the fact that the whole of the capital stock of the company had been issued as full paid stock in consideration of the assignment to it of said permit, and that the certificate required by Section 3990 had been made and filed. The great weight of authority appears to us to be, that one dealing with a corporation with knowledge that stock has been issued as full paid in exchange for property at an amount above its actual value cannot hold such stockholder for the difference between the actual value of the property and the par value of the stock, in the absence of fraud. (Coit v. Gold Amalgamating Co., 119 U. S. 343; Bank of Fort Madison v. Alden, 129 U. S. 272; State Trust Co. v. Turner, 111 Ia. 664, and cases therein cited.) We think that rule especially applicable under our statute which directly "authorizes stock to be issued for property and when so issued shall be declared and taken to be full paid stock and not subject to further calls, etc., and requiring it to be so stated in all statements and reports by the compan/. These provisions we think were intended to give notice'to those dealing with the corporation of the actual assets of the'corporation on which they could rely, and that the holders of stock so issued are not, in the absence of fraud, individually-liable for the debts of the corporation when it became insolvent. We db-not wish to be understood as holding that over-valu[318]*318ation of property so received for stock is not competent evidence tending to show bad faith or fraud, and when grossly excessive may not be sufficient to establish that fact. We are of the opinion that the answer states a defense to the action and that the demurrer thereto was properly overruled. The judgment of the District Court is affirmed.
'Affirmed.
Potter, C. J., and Scott, J., concur.