5 Daly 313 | New York Court of Common Pleas | 1874
Antecedently to the incorporation of the defendants under the general manufacturing act, and in February, 1870, some fifty different individuals and firms, including one Alexander Hudnut, agreed together to subscribe to the stock of such a company, to be incorporated under that act, and each agreed to take a certain number of shares of stock in the company, said Hudnut agreeing to take two shares out of 1,013 subscribed for. They also agreed between themselves, that they would each purchase from the company all ice they might severally require in their business, which the company might be able from time to supply, at a net profit not to exceed one dollar per ton, and that the stock so subscribed for should not be transferable, unless the holder should have fully complied with all of such obligations. The company was subsequently incorporated with a capital of $250,000, divided into 2,500 shares of $100 each, and a certificate of two of such shares issued by the company to Hudnut, dated May 4th, 1871, which contained the provision, “ Said stock shall not be transferred, unless the holder thereof shall have fully complied with all the conditions and obligations he entered into when he subscribed for the same, and he shall be at the time of said transfer free from all debt or debts due said company.”
The two shares of stock were sold by said Hudnut to plaintiff prior to July 3d, 1871, who on that day cahsed the certificate, with a power of attorney indorsed, authorizing him to make a transfer thereof on the boobs of the company, to be presented to the company, and demanded such transfer thereof to be made to him, which they refused, and he brings this action to enforce such transfer.
The defense relied on in the action and presented by the evidence is that.the company had become able to supply its stockholders with the ice they might require in their business,, upon the terms stated in the agreement, but that although Hudnut used ice in his business, he did not purchase any of the defendants. For his failure to do so, the learned judge on the trial held the stock untransferable and dismissed the complaint.
In this I think he erred. Whatever may be the objection to any company incorporated under the general manufacturing act imposing, even with consent of the stockholders, restrictions, upon the transferability of its shares of stock or of forfeiture to the company, it cannot be doubted that it may, by agreement with the stockholder, acquire a valid lien upon a pledge of the stock of the company owned by him for the purpose of securing his debts or obligations to it.
This lien or pledge was all that was attempted to be effected by the provision in the stock certificate issued to Hudnut. While the stipulations contained in the preliminary agreement were, prior to the formation of the corporation, only enforceable as between the parties to it, the company, by its issue of stock certificates adopting the stipulations intended for its benefit, and making them obligatory upon the stockholder to whom it was issued, necessarily assumed by implication a corresponding obligation to do and perform that which was stated as a consideration for the acts expressly undertaken by the other party, to wit, to sell and deliver the ice required in his business upon the terms stated (Pordage v. Cote, 1 Sand. 319; Justice
Another element in such price was also indeterminate, and that was' the cost to the company, upon which any such net profit could be predicated.
Considering the ever recurring risks, losses and expenses of the company in conducting such an extensive business as the producing and supply of ice to its numerous customers, the precise cost to the company of each quantity of ice supplied day by day to Hudnut, and for-which payment was required by the contract to be made on delivery, must have been necessarily a matter incapable of exact ascertainment. A cy pres principle of a merely approximate estimate could at most be adopted, and this finds no recognition in any rule of certainty, upon which legal contracts are founded and can alone exist.
Being of the opinion that the stipulation annexed to the certificate for the purchase of ice, at a profit not exceeding one dollar per ton, was void for uncertainty, and that the defends ants have no lien or right of interference with the transfer of the stock in question, I am of the opinion the judgment should be reversed, and judgment absolute for plaintiff, requiring a transfer of the stock on the books of the company, as prayed for, with costs.
J. F. Daly, and Larremore, JJ., concurred.
Ordered accordingly.