Epitomized Opinion

This was a suit in equty to require Garter to surrender for cancellation to the officers of plaintiff company 1,000 shares of preferred stock. The evidence disclosed that two contracts were entered into between the plaintiffs and the defendants. Under the terms of the other contract he was to assist the company in the sale of $100,000 of common stock for which he was to receive 5% commission. The evidence also disclosed that Carter did not secure an extension of time or raise the money for the payment of the mortgages. Later on through an arrangement with the officers of the company they gave him 1000 shares of preferred stock in place of the common stock. As the lower court refused to order the cancellation of the stock, an appeal was prosecuted to the Court of Appeals. In orderinj that the 1000 shares of preferred stock be sur rendered up and cancelled, the Court of Appeals held

. 1. As the officers of said company did .pot have right to issue to Carter under said contract the com mon stock called for therein, they had- no right ti issue the preferred stock, and it was illegal .for then to do so. ’ > - - '