issue either stock or bonds except for money, labor done or property actually received;"1 and it is usually added that "all fictitious issues" or "all fictitious increase of capital stock shall be void." 3

2

In Delaware, "in the absence of fraud in the transaction, the judgment of the directors as to the value of such labor, property, real estate or leases shall be conclusive." 4

In Kentucky, "neither labor nor property shall be received in payment of stock or bonds at a greater value than the market price at the time said labor was done or property delivered;" and in Wisconsin the property must be estimated at its true money value, equal to the par value of the stock, and actually received. In Louisiana a corporation making a fictitious issue of stock forfeits its charter."

In Florida the capital stock shall be paid in money "unless it be stated in the charter that the capital stock or some therein designated portion of the stock shall be payable in property, labor or services at a just valuation to be fixed by the corporators, or by the directors at a meeting called for such purpose. Property, labor or services may also be purchased or paid for with capital stock at a just valuation of such property, labor or services, to be fixed by the directory of the company at a meeting called for such purpose.'

In Wisconsin is this proviso: "provided that any corpora

1 Ala. Const. Art. 234; Cal. Const. Art. 12, § 11, Civ. Code, § 359; Del. Const. Art. 9, § 3; Ida. Const. Art. 11, § 9; Ky. Stat. § 568; La. Const. Art. 266; Mo. Rev. Stat. § 962; Mont. Const. Art. 15, § 10; N. Y. Stock Corp. L. § 42, as amended 1901, ch. 354; N. Dak. Const. § 138, Civ. Code, § 2877; Pa. Const. Art. 16, §7; S. C. Const. Art. 9, § 10; S. Dak. Const. Art. 17, § 8; Wis. Rev. Stat. § 1753. To the same effect Mass. 1903, ch. 437, § 14 (as to business corporations).

2 La., Mo., ubi supra.

3 Ala., Cal., Ida., Ky., Mo., Mont., N. Dak., Pa., S. Car., S. Dak., Wis.,

Fla. Rev. Stat. § 2128, as amended 1901, ch. 4897.

tion whose stock or bonds have been or shall be admitted to the stock exchange of Chicago, New York, Boston or Philadelphia, or of either of them, may sell such stock or bonds so admitted at the best price or prices current for the time being obtainable therefor on any of the said exchanges at which the same shall be offered for sale." 9

In a few States it is provided that nothing but money shall be considered as payment of any part of the capital stock except as follows:

"Any corporation formed under this act may purchase mines, manufactories or other property necessary for its business, or the stock of any company or companies owning, mining, manufacturing or producing materials, or other property necessary for its business, and issue stock to the amount of the value thereof in payment therefor, and the stock so issued shall be full-paid stock and not liable to any further call, neither shall the holder thereof be liable for any further payment under any of the provisions of this act; and in the absence of actual fraud in the transaction, the judgment of the directors as to the value of the property purchased shall be conclusive; and in all statements and reports of the corporation to be published or filed this stock shall not be stated or reported as being issued for cash paid to the corporation, but shall be reported in this respect according to the fact." 10

"The directors or trustees of any corporation 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-paid stock." 11

"If any stock shall be paid for otherwise than in cash, a majority of the directors shall make and sign upon the record. book of the corporation a statement showing particularly of

Wis. Rev. Stat. § 1753.

10 N. J. Corp. Supp. §§ 47, 48; N. Y. Stock Corp. L. § 42, as amended 1901, ch. 354; N. Car. 1901, ch. 2, §§ 53, 54.

11 Colo. Stat. § 490.

what the property received in payment for stock subscriptions consists, and that it has an actual value equal to the amount for which it is so received. The judgment of the directors as to the value of property accepted in payment of stock shall be final; but the directors concurring in the judgment of such value, in case of fraud in the over-valuation of such property, shall be jointly and severally liable to the corporation for the amount of the difference between the actual value of any property so accepted in payment at the time of such acceptance, and the amount for which it is received in payment. The secretary shall keep a record of the names of the directors concurring in such judgment of value." 12

"Any corporation may purchase mines, manufactories and other property necessary for its business, and the stock of any company or companies owning, mining, manufacturing or producing materials or other property necessary for its business, and issue stock to the amount of the value thereof in payment therefor, and may likewise issue stock for services rendered to such corporation; and the stock so issued shall be full paid stock and not liable to any further call or payment thereon; and in the absence of actual fraud in the transaction, the judgment of the directors as to the value of the property purchased, or services rendered, shall be conclusive." 13

In Maryland the provisions are as follows:

"Subscriptions for capital stock may be made in land or other property proper for the corporation to own for the advancement of its purposes, at a valuation agreed upon between the corporation and the subscriber, when authorized by a stockholders' meeting specially called for that purpose.14 In such case the books of the company shall show what property was received for the stock, at what value, and the number of shares issued for it." 15

12 Conn. 1903, ch. 194, § 12.

13 Me. Rev. Stat., ch. 47, § 50. 14 Md. Gen. L. Art. 23, § 61. 15 Ibid. § 62.

"The conveyance to the corporation of real or personal property at a fair valuation shall be a sufficient paying in of its capital stock to the extent of such value, if a statement, made, signed and sworn to by its president, treasurer and a majority of its directors, giving a description of such property and the value at which it has been taken in payment, in such detail as the commissioner of corporations shall require or approve, and indorsed with his certificate that he is satisfied that said valuation is fair and reasonable, is filed with the secretary of the commonwealth. Such statement shall be included in the certificate of payment of capital." 16

"Capital stock may be issued for cash, property, tangible or intangible, services or expenses. Stock which is issued for cash may be paid for in full before it is issued or by instalments. . . . No stock shall be at any time issued unless the cash, so far as due, or the property, services or expenses for which it was authorized to be issued has been actually received or incurred by, or conveyed or rendered to, the corporation; and the president, treasurer and directors shall be jointly and severally liable to any stockholder of the corporation for actual damages caused to him by such issue." 17 "The directors of any corporation may purchase mines, manufactories and other property necessary for its 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 paid stock and not liable to any further call, neither shall the holders thereof be liable for any further payments. . . . In all statements and reports of the corporation to be published, this stock shall not be stated or reported as being issued for cash paid into the corporation, but shall be reported in this respect according to the facts." 18 The Montana Act adds: "Provided, That on mines any arbitrary value may be fixed and such value shall, regardless of the actual value, be

16 Mass. Rev. L. ch. 110, § 44 (not in force as to business corporations). 17 Mass. 1903, ch. 437, § 14 (as to business corporations).

18 Mont. Civ. Code, § 410; Wyo. Rev. Stat. § 3046.

deemed the value thereof, so as to make the stock issued in payment therefor at such arbitrary value, full paid stock as above defined; and wherever stock has been heretofore issued by corporations in payment for mines purchased by it, such stock so issued shall be deemed full paid stock regardless of the actual value of the mine at the time of such purchase.'

" 19

"Any corporation existing under any law of this State may issue stock for labor done or personal property or real estate or leases thereof; in the absence of fraud in the transaction, the judgment of the Directors as to the value of such labor, property, real estate or leases shall be conclusive. All stock so sold or so issued shall be fully paid and not liable to any further call or assessment (and this shall be so stated on the face of the certificate). But it shall be the duty of the corporation to have its minutes or other permanent records to show, with reasonable detail, the items and character of property (and of the labor or services) for which any stock or bonds were so issued." 20

"No note or obligation given by a stockholder, whether secured by pledge or otherwise, shall be considered as payment of any part of the capital stock." 21

"In no case shall stock be sold or disposed of at less than par, except by a vote of three-fourths of all the stock of the corporation outstanding at the time the vote is taken, and not then until notice of the intention to present a resolution or motion authorizing the sale of stock below par at a stockholders' meeting shall first be published for at least two successive weeks in some newspaper of general circulation, published in the county wherein the principal office of such corporation may be, or if such principal office is not in this state then in some newspaper of general circulation published at the capital of this state. But nothing herein contained shall

19 Mont. ubi supra.

20 Nev. 1903, ch. 121, §§ 54, 55.

21 Mass. Rev. L. ch. 110, § 44; Miss. Ann. Code, § 850; Mo. Rev. Stat. 1323; N. Dak. Civ. Code, § 2878.