Whaler Motor Inn, Inc. v. Parsons

From the findings of the master and the reasonable inferences which may be drawn therefrom, I reach the following conclusions:

1. It is obvious that the promoters, when they subscribed for their stock for “cash,” and paid no cash, were relying upon outside stockholders for the seed money to provide the initial financing. The source of the $300,000 deposit required by the banks before they would furnish the ultimate financing for the construction of the motel came from the payments made to the promoters by the outside stockholders for their shares. This dependency upon outside cash furnishes a…