Regan v. Albin

I dissent.

I cannot indorse the doctrine pronounced in the foregoing opinion. I do, however, realize that to hold otherwise would require a disapproval of several cases, principally opinions of the District Court of Appeal, and also differentiation of some of the cases decided by this court.

The theory of the present holding seems to be based on the postulate that the corporation would have no standing in a suit on the stock subscription agreement nor any defense to an action for rescission of the sale of stock under such conditions; hence a creditor of the corporation would have no better standing. This conclusion, I think, is unsound and does not follow from the premises.

The liability of the stockholder to the creditor is a primary one. The creditor has not been a party to violation of any of the terms of the permit. The alleged violations of the permit offend no rule of public policy and violate no mandate of statute. The conditions imposed by the permit were such as sprang only from the exercise of a discretionary power by the commissioner who issued it. The stockholder may have condoned or even participated in the violation of the terms of the permit. Estoppel should apply because of a wait of three years by the stockholder without complaint and the receipt during all that period of dividends upon the stock. Now that insolvency has overtaken the corporation, the claimed invalidity is urged. Would such claim have been made had the corporation continued on its career of prosperity? I think the whole doctrine of this class of cases should be recast and that a proper line of distinction should be drawn between cases where estoppel does and cases where estoppel does not apply.

Rehearing denied.

Preston, J., dissented. *Page 363