Crocker v. Crane

21 Wend. 211 | N.Y. Sup. Ct. | 1839

Points made and argued on the part of the defendant i I. The plaintiffs should have been nonsuited : 1. For the variance between the bill of particulars and the proof in' respect to the number of endorsers; and 2. For want of evidence that the notice of protest was sent to the place of residence of the defendant.

II. The act of 1832, by its own terms, became void, iff consequence of the construction of the road not being coim menced within four years. The act of 1836 does not profess to revive it, and therefore it was not -revived: consequently, the whole transaction of July, 1886, was without legal authority, and void.

III. The siibscription and distribution of the stock was void, because all the' commissioners did not unite in doing the acts, which were done When power is conferred.by statute upon several, all must meet, though a majority may decide. ■ • - ■

IV. The check in question was void : 1. It was taken by color of law, but without authority; and 2. There was no party payee who could legally receive it.

Y. The check was void, also, because taken in lieu of money in direct violation of the statute. It gave no right to the stock, and was wholly without consideration.

YI. The fraud practiced by one of tile commissioners upon his co-commissioners and upon the subscribers, authorized the defendant to rescind his subscription.

VII. The turning out of the check to the plaintiffs in payment of the private debt of James Van Burén, (probably one of the directors,) was such a gross misapplication as will prevent a recovery by the plaintiffs.

By the Court,

Cowen, J.

The first subdivision of the

plaintiff’s first point does not arise. The declaration and bill of particulars delivered with it are not set out in the bill of exceptions, so that we can judge whether there was a variance, or not, from the check given in evidence.

As to the second subdivision of the first point, the notary’s certificate is not set forth. Non constat, but it was well on its face, and sufficient to prove notice. If the objection mean that independent proof should have been given that the no= tice was properly directed, that is a mistake. The certificate is, per se, prima facie sufficient evidence that it was properly directed. 2 R. S. 212, § 46, 2d ed.

The second point of the defendant is not well taken. The act of 1836 does not say in terms that the first act shall be revived; but it does the same thing by implication. The first act had expired by its own provision, because the road had not been commenced within four years. The last act declares that the time shall be extended, and then professes to amend the former act, and repeal parts of it. The meaning of the legislature is perfectly plain ; and apt words are not essential. Dwarris on Statutes, 702, 3.

As to the defendant’s third and fourth points, the receiving of subscriptions was not a ministerial act. Any one had a right to subscribe and pay in the four per cent. Such an act might be allowed by an agent or deputy appointed by the commissioners, or by one, without authority at the time the acts being afterwards ratified by the board. But the question is different as to the distribution of stock. The fourth section provides, that “ if more than $650,000 shall have been'subscribed, they (the commissioners) shall distribute the said stock among the several subscribers, in such manner as they shall deem most conducive to the interests of the said corporation.” Statutes, Sess. of 1832, p. 191. Here, it appears to me, is a judicial poioer vested in the commissioners; a power to exercise a discretion founded on such considerations as may appear to them beneficial to the company’s interests. These may be various and important, while the decision is, in its nature, beyond the reach of appeal. Walker v. Devereaux, 4 Paige, 229. And see The People ex rel. Case v. Collins, 19 Wendell, 56, 60, &c. Then it has long been perfectly well settled that, where a statute constitutes a board of commissioners or other officers to decide any matter, but makes no provision that a majority shall constitute a quorum, all must be present to hear and consult, though a majority may then decide. Ex parte Rogers, 7 Cowen, 526, 529, 530, and the cases there cited, and see note (a). The statute, 2 R S. 458, § 27, 2d ed. was passed in affirmance of this rule, which it adopts in terms. The rule has been applied to ordinary commissioners of highways, Babcock v. Lamb, 1 Cowen, 238, and a statute was thought necessary to qualify the rule in this case, which has been done slightly, by 1 R. S. 520, 129, 2d ed.

The statute in question, 11, provides that Hem an M’CIure, Benjamin Walworth, John Crane and such other persons as shall become stockholders shall constitute the corporation, and if no stock was distributed, there is no corporation. The objection that there was no party payee who could legally receive the fcheck, is unfounded in fact. Sax-ton was a competent payee. But the awarding and distributing of the stock by the proper authority was a condition precedent to the existence of the corporation. This is the view taken by the present chancellor in Walker v. Devereaux, 4 Paige, 229, upon a statute with similar provisions as to the mode of organization, under which the Utica Schenectady rail road company was constituted, and. which view I am satisfied is perfectly sound. The distribution being conducted throughout by a number of commissioners not sufficient to constitute a legal board, was coram non judice, and void. It follows that there never was any corporation. The defendant got no stock, and all consideration for the check has failed. See also the reasoning of Lansing, Chancellor, in Jenkins v. Union Turnpike Co., 1 Caines’ Cas. in Err. 94, 5.

With regard to the fifth point, the commissioners, in a matter wherein they had a right to act, received uncurrent money and endorsed checks, instead of cash for the per cent-age, required by the act to be paid at the time of the subscription. I can not collect from the evidence that they made any serious stand on the condition that cash should be paid. By cash I mean specie, or its equivalent in current bills of specie paying banks. They received uncurrent money for a while, and at last resolved to receive checks, lending an easy ear to the presumption urged upon them, that a drawer of a check had current funds in place. I can not feel a doubt on reading the evidence that the whole was a mere evasion of the statute. In that I certainly differ from the jury to whom the question was left. It ought not to have been left to a jury, whether knowingly paying and receiving uncnrreut money was a compliance with the mandate of the legislature. At what discount the money stood does not appear. It must I think have been wretchedly worthless, to have been uncurrent amid the inflations of 1836. The checks were received mainly because they were preferred to this uncurrent money. There was some question started whether the drawers had funds, those very drawers too who had, it seems, nothing but uncurrent money to pay. A good endorser was required ; but looking at the whole transaction, this was evidently a substitution of individual credit for cash payment. Giving time of payment was talked of, inasmuch as the money would not be wanted for immediate use. I think the jury fell into a plain mistake when, under the charge of the judge, they pronounced this the ordinary course of receiving checks, to effectuate a cash payment. .Why are they taken as cash in the ordinary course of business ? Because they are a mere transfer of money which a man has at his banker’s. I do not deity that receiving an occasional check might have been a fair substitute. But checks being crowded on the commissioners in a mass, because no subscriber had any thing but uncurrent money to pay, is another matter. The commissioners might as well have received any thing else which an accommodating construction would call an equivalent for cash. But the statute did not allow a mere equivalent. It would not, for instance, have recognized a mortgage or stocks as a payment, of whatever value. The commissioners were here acting ministerially, and if they have not pursued the purposes of the statute, their acts' can not be sustained.

I am therefore strongly inclined to the opinion that the check in question was void, as contrary to the policy of the statute. . Nor can there be any doubt, I imagine, that the contemplated corporation, if I am right as to the facts, failed of going into existence, for want of the proper payments as a condition precedent. Such is the doctrine laid down by Chancellor Lansing in Jenkins v. Union Turnpike Co., 1 Caines’ Cas. in Err. 94, 5, and recognized by this couit in Goshen Turnpike Co. v. Hurtin, 9 Johns. 11. 217: and see Highland T. P. Co. v. McKean, 11 Johns. R. 98, and Dutchess Cotton Manufactory v. Davis, 14 Johns. R. 238. These cases go farther. Each subscriber must pay as a condition to his own liability attaching. Payment was a requisite which the commissioners could not waive. Starr v. Scott, 8 Conn. R. 483.

As to the sixth point: the fraud practiced by one of the commissioners was, I think, properly treated by the judge as not vitiating the whole proceeding, if it had been otherwise regular. He deceived his co-commissioners, who took it upon them to distribute the stock. In this they acted judicially : and had they been a quorum, their judgment would have been binding, notwithstanding the fraud. A judgment is sometimes void where it is got up collusively, and with a view to cheat a third person, who has no chance of being heard. It is then void in respect to that person, who may impeach it in a collateral suit. But it is never holden void as to a party who has legal notice and may be heard to contest it, even though the judges and party complaining may be defrauded either in respect to the form of proceeding or the merits. The party injured being before the court, must take his remedy there in the course of the suit. That a stranger may impeach a covinous or collusive judgment, see The Duchess of Kingstones case, passim, 11 St. Tr. 198, Hargr. ed. and especially p. 262. But that a party or privy shall not, see 1 Phil. Ev. 7th. Lond. ed. 346; Peck v. Woodbridge, 3 Day, 30 ; and note (c) to Doe, dem. Day v. Haddon, 3 Dougl. 312, 313. Where, in a proceeding like that now in question, a quorum of commissioners assemble and the payments are regularly made, the board acquire jurisdiction, and the subscribers are to be considered as parties to the adjudication by which the stock is distributed.

The objection that the check was misapplied, being turned out by Van Burén, may be true; but it would not vitiate it, if it was valid in its concoction, or if it became valid by the due organization of the company. In such an event, it could not be material to the defendant in what name the collection was enforced. He would obtain his stock and pay the stipulated compensation; and the directors would l>e accountable for the amount of the check, at least Van Burén would be, if, as suggested, he was one of them. The point, however, does not appear to have been raised at the trial.

But as the corporation do not appear to have been organized, there having been no quorum to distribute the stock; and as the receiving of the uncurrent money and checks was in fraud of the statute, the cheek in question is void, both as wanting a consideration, and as an act which violated the policy of the law.

New trial granted: costs to abide the event.