109 N.Y.S. 153 | N.Y. App. Div. | 1908
The defendant’s exceptions should be overruled, and his motion for a new trial denied, with costs.
This action when tried and decided by this court (121 App. Div. 928), was regarded as' controlled by our decision in the case of Avon Springs Sanitarium Co. v. Weed (119 App. Div. 560). That case
The Weed case was brought to recover the amount of a subscription for stock in the plaintiff corporation. There was a demurrer to the complaint which was overruled by the trial court and affirmed by this court. Presiding Justice McLennan wrote a dissenting opinion to the effect that no action could be maintained upon the subscription, that it imposed no obligation on the defendant, and the reversal by the Court of Appeals was put upon that opinion. The present action was brought to recover upon a check for $250 drawn by defendant to the order of plaintiff upon the State Bank of Avon, dated December 1, 1905. It satisfactorily appeared at the trial that the defendant October 30, 1905, made a written subscription for five shares of stock in plaintiff; that the plaintiff being duly organized prior to the 1st day of December, 1905, the president of plaintiff delivered on that day the scrip to the defendant and received therefor the check in question. Later the same day the defendant stopped payment on the check, notified the bank not to pay it, but said nothing to plaintiff about it. January 8, 1906, thy defendant sent the scrip to the president of plaintiff, by registered letter, directed to Rochester, K. Y. This letter was returned to defendant unopened, marked “ refused,” and has since been retained by him. The check was presented for payment January 12, 1906, payment was refused, and it was duly protested. The scrip was tendered to plaintiff on the trial. The subscription for stock in this and the Weed case was precisely the same, except as to the number of shares subscribed for. We must, therefore, start here with a recognition of the law that the defendant by reason of his subscription incurred no obligation that could have been enforced. After the subscription was made, however, the plaintiff was duly organized and the defendant accepted scrip for the .stock subscribed for and gave the check in question. The defendant claims there was no consideration for this check. This is the only question ‘we desire to re-examine here.
Stock is personal property, and the transfer thereof was a consideration for the check. (Weaver v. Barden, 49 N. Y. 286, 289.)
In Buffalo & Jamestown R. R. Co. v. Gifford (87 N. Y. 299) it was said by Earl, J.: “ While the subscription was not valid and binding before the complete formation of the corporation, because there was no party with whom the defendant could then contract, yet after the corporation was formed, it accepted the subscription and recognized the defendant as a stockholder, and he recognized
Presiding Justice McLennan, in his opinion in the Weed case (adopted by the Court of Appeals), after quoting the remarks of Judge Earl above, added: “In the case at bar, if the defendant had ratified the acts of the parties who formed the plaintiff corporation, no one would pretend that the payment of his subscription could not be compelled by such corporation.”
Our former decision was correct.
All concurred, except McLennan, P. J., who dissented upon the authority of Avon Springs Sanitarium Co. v. Weed (119 App. Div. 560; revd., 189 N. Y. 557).
Defendant’s exceptions overruled, motion for new trial denied, and judgment ordered for plaintiff upon the verdict, with costs.