25 N.J. Eq. 144 | New York Court of Chancery | 1874
By an order made in this .cause, on the 31st of March, 1873, it was referred to a master, to ascertain what the market value was per share, of the stock of the Riverside Land Improvement Company, on the 1st day of November, 1867, and also the number of shares of stock of that company, which, at the par value, $50 per share, would be equal to the one twenty-fifth part of $22,500 and interest thereon, from September 28th, 1866, to November 1st, 1867, and what the value of such shares would have been at that market value, so ascertained, on the last named day, and the amount of such market value of those shares, together with the interest thereon, up. to the day on which the master should make his report. The master having reported, exception was filed to so much of his report as relates to the market value of the stock. He reports that that value was, on the 1st of November, 1867, $211.30 per share, and gives as his reasons for this conclusion, that the evidence shows that, on the day last mentioned, the stock was not in the market; that the company then owned three thousand one hundred and eighty lots of land ; that each share of stock represented two and sixty-seven one hundred and twenty-fifths lots ; that each acre of land
Finding that the stock was not in the market on the day as of which the market value was to be fixed, he has found and reported what he considers to have been its intrinsic value. The market value and the intrinsic value are, by no means, necessarily the same; the terms are not convertible. The intrinsic value of a stock is not only not an infallible guide to its price in the market, but is, in fact, no guide at all. A stock intrinsically worthless, may bring a good price, while, on the other hand, one of great intrinsic value, may be greatly depreciated. If, under such a reference as that under consideration, the master should find no guide to which he could reasonably commit his conclusions — if he should find no market price within a reasonable period, either before or after the day to which his inquiries are to be directed, the intrinsic value may then enter into his estimate. But, the order in this case called for his report as to the market value, a term deliberately employed as being exactly expressive of the meaning of the court. And if a marketable value could be established, the master was bound to find and report it. The late Chancellor found no fraud in the conduct of the owners of the four and a-half shares of the original association. His language is (Douglas v. Merceles, 8 C. E. Green 335 :) “ The bait of the profits was held out by the others, but Douglas did not believe in any profits ; he had lost confidence in the speculation, and, like a prudent man, was not willing to make himself liable for more than he was already liable for. He rightly apprehended what the others did not see — that, if the scheme was a failure, he would be liable for losses in proportion to his interest. I can see no fraud practised upon him by the others. He was, perhaps, over cautious — at all events, as it turned out, those that had faith in it were right. But he cannot protect himself by his over-cautiousness, and then ask for a share of the profits of his less prudent associates, who chose to run the risk, and who have made the profits. I
The market price of a commodity is the actual price at which it is commonly sold. That price may be fixed by sales in market at or about the time. If no sales can be shown on the precise day, recourse may be had to sales before or after the day, and for that inquiry, a reasonable range in point of time is allowable. Dana v. Fiedler, 12 N. Y. 40; Beach v. Raritan and Del. Bay R. R. Co., 37 N. Y. 457. There had been no sales before this date. There were none at that time; but there were some after it. It appears that, from the 1st of November, 1867, until December, 1870, the value of the stock in the market did not materially fluctuate. There is, therefore, no injustice to the complainant in taking the market prices between those dates as a criterion. And in taking this range, he has the benefit of some, at least, of the improvements put upon the property, •and advantages secured for it by the company, after November 1st, 1867. After that date, an encumbrance was removed
The master should, under the evidence, have found that that sum was the market value of the stock on the 1st of November, 1867. The exceptions, therefore, are sustained. The interest ©n the market value of the stock, from November 1st, 1867, to October 21st, 1873, the date of the master’s report, is $809.66. The master, therefore, should have reported that the amount of the market value of the shares,, with the interest thereon, was $2746.75.