Sterling Varnish Co. v. Sonom Co.

This case involves a claim by a creditor of an insolvent corporation against a stockholder who purchased his stock with an assignment of an exclusive marketing contract for a manufacturing process. The issue is whether under the statute stock can be paid for in such property and contract rights, where the transaction is in good faith and there is no fraud. We hold that it can.

Appellee Sonom Company, Inc. (called Sonom) was incorporated under the laws of Mississippi in April 1957, for the general purposes of manufacturing, buying and selling paints and metal preservatives. The capitalization…