CORPORATIONS - ISSUE OF STOCK

Authors

Abstract

The Eastman Kodak Company, a New Jersey corporation, entered into a contract with Vereinigte Fabriken Photagraphischer Papiere of Dresden, a German corporation, whereby it was agreed that the German company would discontinue the manufacture and sale of "Collodion papers" in North America, Great Britain, France, Spain, and Portugal and that those territories would be given over exclusively to the Eastman Company for the manufacture and sale of this paper. In consideration of this concession the Eastman Company issued 28,450 shares of its no par stock to the German company. This stock was later seized by the United States Alien Property Custodian, and the Eastman Company contended it was not liable to the custodian for dividends on the grounds that no legal consideration had been paid for the stock and that its issuance was therefore void. Corporations organized in New Jersey can issue stock only for money or property. Corporation Act N. J., secs. 48, 49 (2 Comp. Stat. N. J. 1910, p. 1630). Held, that the issuance of stock by a New Jersey corporation in consideration for the purchase of "business" of another company within certain territorial limits was valid as an issuance of stock for "property." Thoms v. Sutherland (C. C. A. 3d, 1931) 52 F.(2d) 592.

Recommended Citation

CORPORATIONS - ISSUE OF STOCK, 30 Mich. L. Rev. 971 (1932).
Available at: https://repository.law.umich.edu/mlr/vol30/iss6/22