"Neither is the clause in the deed providing | 4. CORPORATIONS that John Chappel 'is not to sell or convey the AS DEBT. above land to any one except the heirs of Reu- Where the directors of a corporation declare ben Chappel' * * * binding upon him. It is a dividend, or where the company has earned entirely inconsistent with the deed, and an un-profits, and yet the directors wrongfully refuse reasonable limitation upon the right of disposition vested in him by the deed subject to the estate retained by the grantors."

The charter fixes $20,000 as the maximum | whereupon he will amend and make the holdindebtedness of the corporation, and exempts ers parties in order that they may set up the private property of the stockholders from the payment of corporate indebtedness otherwise than as provided by section 547 of the statute as it then existed; that is, no more than double liability.

are past due. He might be treated as a corporate creditor to that extent, if it had appeared that the directors had declared a dividend or that profits had been earned and the directors had wrongfully refused to declare a dividend.

ferrred stock a lien upon the property of the | tion. As we have already noted, the petition company to the prejudice of creditors. By shows that some of the dividend payments the charter the preferred stock is a part of the $40,000 capitalization, and by the certificate in question it is stipulated to be a part of the capitalization. The organization tax was paid thereon. Unless that was the purpose of the certificate, and unless the holder thereof be considered a stockholder, and not a creditor, then the provision for 7 per cent. dividends would be usurious-in conflict with the statutes.

[2] Except as to preference in the payment of dividends and distribution of the assets, as provided by the certificate and charter, and when authorized by statute, the holders of common and preferred stock have the same rights and are subject to the same liabilities.

"As against creditors a preferred stockholder has no greater rights than a common stockholder, and the corporation cannot give them greater rights in the assets of the corporation as against the creditors, unless by virtue of an express statutory provision." 2 Clarke & Marshall on Private Corporations, § 413.

This text was approved in the case of

Fryer v. Wiedemann, 148 Ky. 379, 146 S. W. 752, 39 L. R. A. (N. S.) 1011, and, reasoning therefrom, the court concluded that:

[5] The use of the word "interest" in the certificate does not require that it be construed as a certificate of indebtedness rather than stock. The provision is that:

"It bears interest at the rate of 7 per cent. per annum, payable annually in the way of dividends, and the holder shall be entitled to receive said interest in the way of annual dividends," etc.

That is, the interest is payable in the way or manner of dividend payments; in other words, the payments are due and payable at such times and in the way dividends are paid-out of the net profits, 7 per cent., and no more. That the words interest and dividends are used interchangeably is shown by the following quotation from the certificate:

fore any dividends shall be declared or paid on the common stock of said company."

"The said annual dividends shall be paid be

guilty of bad faith or a willful abuse of dis

[6] Dividends are payable out of the prof"As preferred stock is a part of the capital stock of a corporation, holders of such stock are its and surplus funds of the corporation as not preferred to the creditors of the corpora- the directors may, in the exercise of a sound tion in the distribution of its assets. Conse- discretion, declare. Unless the directors are quently, the preferred stockholders cannot be reimbursed before the corporate debts are paid." [3] The Fryer Case, supra, followed the rule laid down in Rider v. John G. Delker & Sons Co., 145 Ky. 634, 140 S. W. 1011, 39 L. R. A. (N. S.) 1007, where a holder of preferred stock sued a corporation, as in this case, and insisted that he be treated as a creditor, rather than a stockholder. The court said:

"The capital of a corporation is the sum total of its stock, whether common or preferred. Certificates of stock are mere evidences that the holders thereof have invested the sums called for in the

cretion, the courts will not interfere. There being no allegation of profits or of bad faith or abuse of discretion on the part of the directors, the presumption follows that there are no profits out of which to pay dividends. We are of opinion that the petition and exhibits show that appellant is a stockholder and not a creditor. It follows, therefore, that he is not entitled to a judgment against the corporation for any investment he made in the corporate stock.

The judgment of the lower court, sustaining demurrer to the petition, is therefore affirmed.

certificates in the enterprise. They run the risk of losing their stock if the business is not a success. As between themselves and third persons who deal with the corporation and give it credit, their stock is equally liable. It is only in cases where the corporation is solvent and the rights of creditors will not be injuriously affected there- RAMEY et al. v. IRONTON LUMBER CO.

by that agreements as to preferences among themselves may be enforced. The entire capital, without regard to any arrangement which may exist between common and preferred stockholders, is at all times subject to and liable for the debts of the corporation, and no part of the capital can be withdrawn from the business until the debts of the corporation are satisfied."

[4] But appellant says that this rule does not apply because there is nothing in the case to show that the corporation is insolvent, and therefore, he argues, we cannot infer that the rights of any creditor will be prejudiced. This argument is inconsistent because it is based upon the theory that appellant is a stockholder and entitled to have his stock contract enforced with the corpora

1. LOGS AND LOGGING 3-ACTION FOR ADVANCES-SUFFICIENCY OF EVIDENCE.

In an action to recover the balance of money advanced on a timber contract, in which defendants admitted an indebtedness and alleged its overpayment by an order on the cross-defendants, and in which plaintiff by an amended petition sought to recover against the cross-defendants, and in which the measurement of logs sold by defendants to the cross-defendants was the issuable fact, evidence held sufficient to sustain a judgment for defendants against the cross-defendants.

[Ed. Note.-For other cases, see Logs and Logging, Cent. Dig. §§ 6-12; Dec. Dig. 3.]

2. APPEAL AND ERROR 877-RIGHT TO AL- | Company for the difference between $1,379.LEGE ERROR-INSTRUCTIONS-ESTOPPEL.

In such action the cross-defendants were estopped to complain of instructions with reference to a branch of the case affecting only the plaintiff and the defendants and authorizing a verdict for cross-defendants against plaintiff, since neither had any bearing on the verdict upon which the judgment for defendants against cross-defendants was entered.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 3560-3572; Dec. Dig.

877.]

3. LOGS AND LOGGING 3 ACTION FOR

ADVANCES INSTRUCTIONS AND ISSUES.

In such action and cross-actions an instruction that the jury would find for the defendants against the cross-defendants the value of all timber delivered by defendants to the cross-defendants under a contract with them, after deducting the amount paid by the crossdefendants when the contract was made and a certain other payment, and find for defendants the amount admitted by cross-defendants to be due, was proper.

[Ed. Note. For other cases, see Logs and Logging, Cent. Dig. §§ 6-12; Dec. Dig. 3.] 4. APPEAL AND ERROR 216-REVIEW-IN

STRUCTIONS.

The contention on appeal that an additional instruction should have been given in the terms indicated by appellants' brief would not be considered, where no such instruction was offered or asked by appellants.

[Ed. Note.-For other cases, see Appeal and Error, Dec. Dig. 216; Trial, Cent. Dig. 8 627.]

72, for which the order had been given the Ironton Lumber Company on them, and $1,254.78, the amount they (Greers and Burke) admitted owing the Ironton Lumber Company. The Ironton Lumber Company filed an amended petition making J. B. Ramey, Grant Thornberry, and L. R. Thornberry, partners composing the Breaks Lumber Company, defendants to the action, setting up the

order on them received from Greers and

Burke, their acceptance of same, and asking judgment against them for the amount thereof, to wit, $1,379.72. The acceptance of the order in question was in the following language:

"We hereby accept the above order to the amount that we will owe Greer under timber contract."

The acceptance was signed by Ramey and the two Thornberrys. It was further alleged in the amended petition of the Ironton Lumber Company that after their acceptance of the order appellants became indebted to Greer under the timber contract to the full amount of the order accepted by them.

After being served with summons upon the amended petition of the Ironton Lumber Company and the cross-petition of Greers and Burke, the appellants filed, as applicable to both, a pleading styled an answer, counAppeal from Circuit Court, Pike County. terclaim, and cross-petition, much of which Action by the Ironton Lumber Company was properly stricken out by the circuit against W. M. Greer, Franklin Greer, and court. Included, however, in the parts not M. M. Burke, with cross-complaint by de- stricken out were allegations to the effect fendants against J. B. Ramey and others, that they had, by a written contract made composing the partnership of the Breaks in March, 1911, with W. M. Greer, bought of Company, and amended petition him what he falsely represented to be 300 making Ramey and others defendants. Ver- logs in Shelby creek, Pike county, for which dict for plaintiff against defendants, for cross-defendants against plaintiff, and for defendants Greer against cross-defendants, and the cross-defendants appeal. Affirmed.

Lumber

they agreed to pay him certain prices set forth in the contract, $2,000 of which was paid when the contract was made, the remainder to be paid when the logs were rafted

J. S. Cline, of Pikeville, for appellants. and measured. The writing evidencing the J. F. Butler, Roscoe Vanover, E. J. Picklesi- | contract was filed with and made a part of mer, and J. J. Moore, all of Pikeville, for appellees.

the answer, counterclaim, and cross-petition. It was also alleged in the answer, counterclaim, and cross-petition that there were, in SETTLE, J. The appellee Ironton Lumber fact, only about 200 logs in the lot purchased Company sued in the court below to recover by them of Greer, that when delivered and of the appellees W. M. Greer, Franklin Greer, measured the price of the 200 logs amounted and M. Burke $1,530.70, alleged balance due to only $2,297, $2,000 of which had previousit for money advanced them on a timber con- ly been paid, and that out of the $297 retract. The answer of Greer and Burke, maining they paid one Sol Tackitt the sum which was made a cross-petition against the of $168 for assisting them in, and other exappellants, J. B. Ramey, Grant Thornberry, penses growing out of, the running of the and L. R. Thornberry, composing the partner- logs to the mouth of Shelby creek, which ship known as the Breaks Lumber Company, left them owing Greer only $99.80. They admitted an indebtedness to the Ironton Lum- denied, however, that the $99.80 should be ber Company of $1,254.78, and alleged its paid to the Ironton Lumber Company on the overpayment by an order for $1,379.72 they order given on them by Greer, and alleged gave it upon the Breaks Lumber Company; that the Ironton Lumber Company was init being alleged that the latter company was debted to them in the sum of $119 for some then owing them in excess of that amount. of their timber which that company had Judgment was asked in the cross-petition of wrongfully converted to its use, for which the Greers and Burke against the members sum they prayed judgment against that comof the partnership of the Breaks Lumber pany.

Such being the meaning of the contract, the question that next arises is: Did Greer deliver in the river a sufficient number of logs to amount at the contract prices to a sum that would equal the $2,000 paid him at the making of the contract, plus $168 which appellants admittedly paid Tackitt, plus $1,200, the amount of the verdict and judgment recovered by the Greers. If this proposition has been established by the evidence, the right of the Greers to recover of appellants the $1,200 awarded them by the verdict of the jury and judgment of the court cannot be doubted.

Following the filing of the above pleading, the whole, which, after deducting the $2,000 Greers and Burke filed an amended answer, previously received by Greer, they were reply, and cross-petition containing a trav- to immediately pay. erse of the averments of the answer, counterclaim, and cross-petition of appellants, and alleging that W. M. and Franklin Greer delivered to the latter in Sandy river at the mouth of Shelby creek, under their contract with them, 337 logs, the contract price of which amounted to $4,004, and, after deducting therefrom the $2,000 which they were paid by appellants when the contract with respect to the logs was made, and the $168 which the latter paid to Tackitt, there was left due them from appellants $1,836, for the difference between which and the order of $1.379.70 they had given the Ironton Lumber Company they asked judgment against appellants. The Ironton Lumber Company, by reply to the pleading last mentioned, waived all of its claim against Greer and Burke, except $1,254.78.

After the filing of the voluminous pleadings referred to the case went to trial, and the jury returned a verdict in favor of the Ironton Lumber Company against Greer and

It is not to be overlooked that the logs which were sold under the contract were in Shelby creek at the time of the sale, and that appellants, or some of them, then saw the logs and joined with Greer in making the estimate as to the number. If there were then less than 300 of the logs, they

would hardly have agreed with Greer that

such was their number. It was also their

Burke for $1,254.78, of which the latter do estimate, as well as his, that the $2,000 they not complain. They also returned a verdict estimate, as well as his, that the $2,000 they in favor of appellants against the Ironton then willingly paid him did not exceed half Lumber Company for the sum of $119, of the estimated value of the logs then in the which the latter company makes no com- creek. Otherwise it is not reasonable to supplaint; and, finally, a verdict in favor of pose that they would then have paid him $2,W. M. and Franklin Greer against appel-000 as the estimated half of the value of the logs. There is no contrariety of evidence lants, J. B. Ramey and Grant and L. R. Thornberry, for $1.200. Judgment was enter- as to the fact that at the time of the instied in conformity to the above findings, and tution of this action all the logs which the court, on its own motion, credited the Greer had in Shelby creek he had delivered judgment of the Ironton Lumber Company at the boom or in the river, and that they of $1.254.78 against Greer and Burke with had been measured after their delivery both the $1,200 for which W. M. and Franklin by W. M. Greer and his brother, Franklin, Greer were given a verdict by the jury and also measured by the appellants when against appellants. Appellants complain of rafted by them. the verdict of $1,200 returned against them According to the evidence of the Greers in favor of the Greers, and by this appeal there were 337 logs delivered. W. M. Greer seek the reversal of the judgment entered testified, in which he was corroborated by his thereon. The grounds urged by appellants brother, Franklin Greer, that he and his for the reversal of the judgment are: brother measured all of these logs, and that (1) That the trial court erred in refusing by actual measurement there were 13,360 their request for a peremptory instruction directing a verdict in their behalf as against the Greers; (2) that the verdict is flagrantly against the evidence; (3) error of the trial court in instructing the jury.

cubes, which, at the contract price, amounted to $4,004, and that, after giving appellants credit by the $2,000 paid before the delivery and the $168 paid Tackitt, there was still left a balance in his (Greer's) favor of $1,836. [1] The first and second grounds will be The measurements thus made were also corconsidered together. In our view of the evi- roborated by the original tally sheets condence neither of them can be sustained. The taining the entries which were made by W. written contract between W. M. Greer M. Greer and Franklin Greer. The measureand appellants, properly interpreted, simply ment of the logs made by appellants at a means that appellants purchased of Greer, different time was not shown by the introat the prices therein stipulated, what they duction of original tally sheets, but only by and Greer estimated to be 300 logs then in the ledger, purporting to have been copied Shelby creek; that $2,000 of the purchase from the original entries, without showing money was then paid Greer by the appel- the details contained in the Greer tally lants; that these logs were to be delivered sheets.

by Greer at the boom or the mouth of Shel- The evidence introduced for appellants by creek, and, when delivered, were to be tended to prove that there were between 200 rafted by appellants, and by them then and 240 logs. In addition to the measuremeasured to ascertain the purchase price of ment shown by their ledger, the appellants