On Juno 20th, 1908, the defendant executed a note for $100, payable to the Cavalier County Farmers’ Co-operative Mercantile Company on November 1st, 1910, and delivered such note to one Welo, the secretary of the Cavalier County Farmers’ Co-operative Mercantile Company. Both Welo and the defendant testified in regard to the transaction, and, while they disagree as to what was said at the time, they agree that the only consideration defendant was to receive for such note was a share of capital stock in the Cavalier County Farmers’ Co-operative Company.
The defendant testified in part: “We had quite a lengthy conversation about the giving of this note; were speaking of it quite a while in there; Mr. Welo got me in there and we was speaking of it quite a while in there; we was speaking about this note, and he wanted me to go in there and speak to him in there, and we was speaking back and forth, and I said I didn’t want a share in there, in that company, be*53cause I did not have the money; that was a fact; then he said: ‘That is all right, and you take a share here wml we tuill give you the money and we will take your note’ . . . He said he would take my note for the money, in place of the money, instead of the money. He did not at that time issue me a share of stock nor hand me a written receipt for a share of stock in the company, and he did not give me a written receipt for the note; nor did ho give me any writing to show what I was to get for the note, if anything; I was not owing the corporation anything when that note was given.”
Defendant also made the following offer of proof: “Defendant at this time offers to prove by Mr. Sabie, now on the stand, that, sometime before the note in question was payable, he spoke to the manager, Mr. Welo, and asked Welo to give defendant back the noto in question,which Welo then said ho would do, but could not give it back just then as the safe was locked, and the note was in the safe, but told defendant he would get it another time.” The offer was rejected, and defendant denied permission to offer evidence tending to- establish the matters therein referred to.
It is undisputed that the Cavalier County Farmers’ Co-operative Company was a going concern at the time of the execution and delivery of the said promissory note involved herein, and had been so for a considerable length of time prior thereto, and that such corporation remained a going concern until July, 1910, or more than two years after the execution of the note. In July, 1910, however, the corporation executed a trust deed and thereby assigned its assets to plaintiff as trustee for the benefit of its creditors, and plaintiff claims that the note involved in this action came into his hands as part of the assets of said corporation under said trust deed.
It was stipulated as a fact upon the trial “that no stock was ever issued to Mr. Sabie, or offered to him.” And the undisputed evidence shows that the defendant at no time received any notice of acceptance of his offer to purchase stock, nor did he ever receive any notice of' meetings of stockholders, or any notice whatever relative to the affairs; of the corporation, nor was he in any manner .whatsoever treated or recognized as a stockholder by the corporation or any of its officers, j
The books of the corporation wore not offered in evidence, although the defendant demanded their production, and there was no evidence *54whatever tending to show that the plaintiff was a stockholder, except the mere fact that he executed the promissory note sued upon. The defendant testified positively that there was no written agreement, but that the agreement to purchase rested in parol only. Welo, the secretary of the corporation, who received the note,- testified, however, that there was a written agreement or subscription, but such subscription was not produced or offered in evidence, or its absence accounted for and secondary evidence of its contents offered. Hence, it is of no consequence in the consideration of this cause.
The court directed a verdict against the defendant, and he appeals from the judgment and the order denying his motion for a new trial.
Defendant has assigned numerous errors, but we find it necessary to consider only one; viz., the error assigned upon the direction of a verdict in plaintiff’s favor. Did all the evidence in the case prove that the defendant was a stockholder in the Cavalier County Farmers’ Co-operative Mercantile Company to such a degree of certainty that upon a fair consideration thereof reasonable men could draw only the conclusion that he was such stockholder ? If so, the verdict was properly directed. If the evidence failed to show this, or if it was a question upon which reasonable men in the exercise of their reason might arrive at different conclusions, it was error to direct a verdict.
Under the laws of this state, a stockholder is one who owns capital stock in a corporation (Comp. Laws 1913, § 4515) ; and “all corporations for profit must issue certificates of stock when fully paid up, . . . . such shares of stock are personal property, and may be transferred by indorsement . . . and delivery of the certificate.” Comp-. Laws 1913, § 4521. And the note or obligation of a stockholder may not be accepted in payment of stock in the corporation (Comp. Laws 1913, § 4529), unless it is stock which the corporation has purchased from its surplus profits, under the provisions of § 4531, Compiled Laws 1913, and holds among its assets the same as other property. See German Mercantile Co. v. Metz, 21 N. D. 230, 130 N. W. 221.
It is well to remember that we are not dealing here with a subscription to stock in a corporation to be thereafter formed, where the rights of other subscribers are involved (see Thomp. Corp. 2d ed. § 514) ; but, we are dealing with a case wherein a person, at the solicitation of an officer of an existing operating corporation, makes an offer to *55purchase, or agrees to purchase, stock in such corporation, and executes and delivers a promissory note to such officer as payment for the •stock. And, under the evidence in this case, it must be presumed that the stock referred to by Welo consisted of stock which the corporation had purchased from its surplus profits, and held in its treasury. See German Mercantile Go. v. Metz, supra. Such stock is, under the -express provisions of the laws of this state, personal property, and ■consequently an offer or agreement to purchase the same stands upon the same basis as any offer to or agreement for the purchase of other personal property. See Barnard v. Tidrick, 35 S. D. 403, 152 N. W. 690; Marson v. Deither, 49 Minn. 423, 52 N. W. 38; Thomp. Corp. 2d ed. § 3788.
But it is immaterial whether the stock which defendant offered to purchase was stock theretofore issued and repurchased by the corporation and held in its treasury, or was part of its potential or authorized capital stock not theretofore issued. In any event the evidence tends to show that defendant offered to purchase from an existing ■operating corporation, a share of stock, and the undisputed evidence shows that the defendant was to receive as the only consideration for the promissory note sued upon in this action capital stock in said ■corporation. The plaintiff in this case seeks to recover on the strength •of the title of the corporation; and its title and right depended upon its contractual relations with the defendant. The mere act of subscribing did not necessarily constitute the defendant a stockholder. Thomp. Oorp. 2d ed. § 560. In the absence of regulations to the' con“trary, the principles which govern the formation of an ordinary con-traet apply with full force to a contract of subscription to corporate stock. Helliwell, Stock & Stockholders, § 49. And “as in the case •of a proposition for any other contract, there is no contract until the proposition has been accepted.” 10 Oyc. 384.
Bor “the American doctrine seems to be that the subscription must he accepted in terms, or else that it must be acted upon, which conduct is tantamount to an acceptance, and this within a reasonable time.” Bor although “no particular form of acceptance is essential in order to constitute this proposition to become a shareholder a binding contract . . . there must be some unequivocal act on the part of the agents having authority to accept the offer, so that there can be no *56doubt as to the obligation of the corporation as well as of the subscriber.” 1 Morawetz, Priv. Corp. 2d ed. § 48; 10 Cyc. 384.
And, while it is true, as plaintiff contends, that a certificate of stock need not ordinarily be tendered as a condition precedent to the maintenance of a suit upon a stock subscription, it by no means follows that a person who offers to purchase, or who subscribes for, stock in a corporation thereby becomes liable for the payment of stock. The question in such suit generally resolves itself into an inquiry as to whether the party sought to be held has actually become the owner of stock in the corporation. If he has, then the mere fact that a stock certificate has not been issued is of no consequence, as the certificate is merely the paper representative or evidence of his stock, and the mere issuance and delivery thereof are not the acts which confer upon the owner his rights in the corporation, but such certificate is merely evidence of his ownership of stock. A stockholder is one who owns stock. Such ownership carries with it not only the liabilities, but also the rights and privileges, incident thereto; i. e., the owner of such stock acquires an interest in the franchises and business of the 'company, and also becomes subject to all the liabilities of a stockholder, including the obligation to pay for the stock so held. But the obligation to pay for the stock exists only in case it is also binding upon the corporation. If the obligation is not mutual and equally binding upon the corporation, the promise to pay is not supported by -a. sufficient consideration. The criterion of liability is whether any apt has been done by which the corporation is compelled to recognize the promisor as a stockholder. If the corporation is not bound by what took place to recognize a person as a. stockholder, neither -is. he bound to pay for stock.
“On the plainest principles; of"-law, and as a general rule, a subscription to the capital stock of á corporation is not binding unless there ■ is a consideration. It is equalty essential that there be mutuality of obligations, and that both parties be bound by the instrument or contract. ‘The obligations of one can only be sustained by the corresponding obligation of the other. If both are not bound, neither is bound, and the transaction is a nullity.’ ” 1 Thomp. Corp. § 570.
In the case 'at bar, it is conceded that no certificate was ever issued’ to Sabie or delivered to him. It is undisputed that the corporation remained a going concern for more than two years after defendant’ *57executed and delivered the note involved herein, and the- evidence adduced by the defendant ivas to the effect that during all this time he received no notice of meetings of stockholders, nor did the corporation or its officers in any manner, recognize or treat him as a stockholder. We are agreed that, under the facts and circumstances thus established, defendant made a prima facie showing that he never became a stockholder, and, consequently, he overcame the presumption that the note ivas executed and delivered for a consideration, and the burden was shifted to the plaintiff to show that the defendant became a stockholder and received the consideration agreed upon. The trial court therefore erred in directing a verdict in favor of the plaintiff. The judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.