35 N.Y.S. 868 | N.Y. Sup. Ct. | 1895
Lead Opinion
The complaint in this action alleged that on the 12th of October, 1894, the plaintiff and defendant entered into an agreement in writing, a copy of which was annexed to the complaint, whereby the plaintiff agreed to deliver to the said defendant 899 shares, of the par value of $100 each, of the capital stock of the Greenbush Waterworks Company, of- Greenbush, N. Y., and 865 shares, of the par value of $50 each, of the capital stock of the West Troy Waterworks Company, of West Troy, N. Y., and 287 shares, of the par value of $100 each, of the capital stock of the Green Island Water Company, of Green Island, N. Y., on or before the 20th day of December, 1894, for and in consideration of the sum of $6,695, which the defendant agreed to pay. Complaint further alleged that the defendant failed to fulfill his agreement, and failed to pay said sum to the plaintiff, although the plaintiff was able, willing, and ready to deliver to said defendant the stock mentioned, and to carry out the provisions of said agreement by him to be performed, and that thereafter the plaintiff sold the stock at public auction, for the account, and at the risk, of the defendant, after due notice to the defendant, for the sum of $2,025, after deducting expenses; and that by reason of the failure of the defendant to buy said stock at the time designated, and to carry out said agreement, the plaintiff had been damaged in the sum of $4,670, which said defendant had failéd to pay, and judgment was then demanded for that sum. The defendant demurred to this complaint, upon the ground that it did not state facts sufficient to constitute a cause of action. This demurrer being overruled, from the interlocutory judgment thereupon entered this appeal is taken.
Upon an inspection of the agreement annexed to the complaint, it appears that, in addition to the delivery of the stock above mentioned, upon payment by the defendant of the sum stated, the plaintiff had
The judgment should be reversed, with costs, and the demurrer sustained, with costs, and with leave to the plaintiff to amend, upon the payment of costs in this court and in the court below.
FOLLETT, J., concurs.
Dissenting Opinion
(dissenting). The vice claimed to be inherent in the contract sued upon is the agreement by the plaintiff that the defendant should have the management of the three companies, and receive compensation for such management, and an equal representation in the board of directors of the three companies, a portion of the stock in which, the agreement provided, should be sold to the defendant; this action being brought to recover damages for defendant’s failure to pay the purchase price of such stock. If it had been made to appear that this was an attempt to barter away the interests of the corporation, by one of its stockholders or directors, for a money benefit to be derived by the plaintiff, then, undoubtedly, it would be against public policy, and the contract could not be enforced. In this case, however, I fail to see how any such inference can be drawn, or presumption indulged in. It has always been held that a stockholder had the right to sell his stock, and if in the sale it was coupled with an agreement by which the person buying was to take an active interest in the affairs of the corporation, I do not see why, in the absence of anything to show that this was done in bad faith, or contrary to the real interests of the corporation itself, it should not be upheld. The difference between my view and that presented in the prevailing opinion is in respect to the presumptions to be drawn from the contract, which is entirely silent upon the question as to whether the transaction would or would not inure to the benefit of the corporation. If, under such conditions, the presumption is to be indulged in, in the absence of any evidence to support it, or facts appearing to warrant it, that such an arrangement is inimical to the interests of the corporation, then the conclusion reached would be right. But, as presumption should favor good faith and honesty, rather than the reverse, I do not see why the contract is not susceptible of the view that it was made in good faith, without design to injure the company, but, on the contrary, to bring in as a stockholder,