7 Barb. 157 | N.Y. Sup. Ct. | 1849
This is an action to recover the amount of several calls, for installments upon a subscription for the stock of the company. The declaration contained the common counts in indebitatus assumpsit, and also several special counts, framed upon a subscription paper which was proved to be the paper used as a substitute for a book at one of the places, where the books for subscribing to the stock of the road were opened, pursuant to the notice contained in the first sec
severally agree, for and in consideration of the benefits to be derived from becoming members of said company, and of obtaining the benefits thereof, agree to pay to the said company when organized the several sums set opposite our names, to be paid to the directors of the company, for the purpose of constructing a plank road from Hamilton to Deansviiie, &c.; said subscriptions to be parts of the capital stock of said company. Hamilton, Dec. 13, 1847.”
Upon the trial, the plaintiffs proved the subscriptions of the stock by the defendant and others, upon the opening of the books pursuant to notice duly given and published; the adoption and execution of the articles of association, signed by a large number of persons whose subscriptions amounted to considerably more than $500 to the mile, and the payment of over five per cent on the amount so subscribed, and the filing of the articles, with the affidavit required by the first section of the act annexed, in the office of the secretary of state, in the month of January, 1848. It further appeared that after this the capital stock actually taken was increased to $19,000, though it had never been filled to the amount of $26,000, the sum named in the articles as the amount of capital stock of the corporation. The company, after its organization commenced operations, completed and filed its survey, and expended on the faith of the subscriptions a large amount of money. The defendant never signed the articles of association, but he was put down in the
The exceptions taken to the admission of evidence, were probably waived by the agreement to allow a verdict to be taken subject to the opinion of the court. But, inasmuch as they would, if well founded, strike out of the case much of the ground on which the plaintiffs’ right to recover rests, we will proceed to consider them. The first was an exception to the ruling of the court in admitting Philander Barker to be sworn as a witness. Barker had been a stockholder in the road, but some days before the trial he had transferred his stock and received a note for it, at the suggestion of the plaintiffs’ attorney, without inquiring into the reason of the suggestion, and without any view of becoming a witness. The attorney, however, testified that it was his object in advising the transfer to make Barker a witness. Upon this evidence the counsel of the defendant objected to the competency of the witness, not on the ground that he was still interested; but on the ground that he was the assignor of a thing in action assigned for the purpose of making him a witness, under the provisions of section 352 of the code of 1848. The judge held, and we think correctly, that, if the witness was not interested, in the event of the suit, the provision in question did not render him incompetent. The section declares, not that such an assignor shall be incompetent, but merely that the 351st section shall not apply to him. The latter section provided that no person should be excluded by reason of his interest
In a subsequent stage of the suit the plaintiff offered the books of the company in evidence, to prove the resolution calling for payment of the several installments upon the subscriptions for stock. To this evidence the defendant objected. The court admitted the books, to show that the corporation had taken the requisite steps to make the defendant liable, and to the admission of the books for that purpose there was no further objection. Those decisions at the circuit Ave believe to be correct. We come now to the consideration of the grounds on which the defendant moved for a nonsuit, and upon which he iioav claims that he is entitled to judgment. The grounds stated by the defendant are eight in number; but they may be embraced in two general propositions.
I. That the agreement Avhich the defendant signed Avas void, for the reason that it Avas executed before there Avas any company in existence. That it purports to be an agreement between the original signers alone; and can not be extended by parol evidence; that it was not mutual, the company not being bound by it; that it does not run to the company.
On the particular paper to Avhich the signature of the defendant was attached, there were only the names of ten subscribers. But this paper was only one of the several books Avhich Avere opened pursuant to notice, under the act; and the defendant’s counsel insists upon too narrow and technical a view of the
All the grounds of objection arising under the propositions we are now considering, are based on the supposed want of sufficient parties to the agreement, or of a sufficient consideration to uphold it, or of a sufficient promise expressed in it. All the cases which have held subscriptions of stock void, have gone upon one or the other of these grounds. The case of The New Bed-ford Turnpike Company v. Adams, (8 Mass. Rep. 138,) where there was a mere subscription for stock, without any promise to pay, and the only remedy provided by the act of incorporation being the forfeiture of the stock, was placed on the distinct ground that there was no obligation to pay created by the subscription, and there being no promise, that the act contemplated a forfeiture only. In the Essex Turnpike Co. v. Collins, (Mass. Rep. 292,) a corporation had been organized to construct a road from a certain point to Boston; and a certain person named Foster, procured the defendant to subscribe a paper to pay a certain sum, with the view of having the road extended to Salem ; and although there was evidence that the directors met, afterwards, and resolved to extend the road to Salem, yet there was no proof that Foster was the agent of the company, or that the company had any knowledge of his acts. The agreement was held void for want of either parties or consideration. The case of the Phillips Limerick Academy v. Davis,
A suggestion is made in the written argument furnished us, that the declaration is not properly framed to enable the plaintiff to recover upon the ground of a consideration founded on ■ mutual promises. We can not say how that may be. The declaration is not set out in hcec verba in the case ; but it is
II. The second general proposition on which the defendant objects to the plaintiff’s right of recovery is embraced in his last three points, and is founded on the idea that inasmuch as the agreement signed by the defendant contemplated a company whose capital stock should amount to $28,000, a subscription to the full amount of the sum named was a condition precedent to the right to recover. This is an error into which the counsel has fallen from not having carefully read the first sections of the plank road act. It is true that such a result will follow, where the subscription of a certain amount of stock is made a condition precedent by the terms of the act of incorporation. It was so held in the 6 Pick. Rep. 23; 10 Id. 142 ; and 9 Id. 187. It will be found, however, upon examination, that in each of these cases the condition was created by the act itself. The act under which this corporation was organized, provides that “ when stock to the amount of at least $500 for every mile of the road so intended to be built shall be in good faith subscribed, and five per cent paid thereon,” &c. the said subscribers may elect directors, execute their articles and file them in the office of the secretaiy, from which time they are a legally organized corporation. This result is accomplished before the entire capital stock is subscribed, and generally before one fourth part is subscribed. The sum of $500 is scarcely a fourth of the cost per mile of the cheapest plank roads constructed in this country. In the case before the court, it appears that the road is 15 miles in length, that it was somewhat more than two thirds done, and that the expenditure had already amounted to about $20,000.
III. We have already seen that a subscription to the articles of association can not be an act indispensable to membership of the company. For the articles are filed in the office of the secretary when, ordinarily, less than one third of the amount is subscribed. A subscription to any legal and valid instrument, by which a party engages to become a member of the company when organized, and to pay a given sum which is to be a part of the capital stock, followed up by an acceptance of a certificate for the stock, will make such subscriber a member of the corporation. The acceptance of the stock certificate is a waiver of any informality that may have intervened, short of an absolute defect of jurisdiction. In a case far less strong than this, the supreme court of Massachusetts held that the corporation might recover against a subscriber the amount of his subscription, under a general count for money paid at the defendant's request. In the 14th Mass. Rep. 172, before cited, the defendant, when called on for his subscription, said he had no money, but would deliver as part payment a quantity of shingles, which he accordingly did, and the same were received and used by the trustees. This was held by the court to have been such a recognition of his promise, and such an implied request to the trustees to proceed on the faith of that promise and expend money, relying upon its performance, that after they had actually expended the money, he was liable for the money so expended, to the amount of his subscription. If that case be law, then a fortiori will the acceptance of the certificate of stock by the defendant in this case lay the foundation for a recovery under a count for money paid.
IT. A map of the survey of the road is appended to the case to show how far the site of the road deviates from the route pne
The money having become due, and the defendant liable to pay it, and the amount being a sum certain, the allowance of interest was right. Upon the whole case, we are satisfied, that the plaintiff should have judgment on the verdict. No rule of law has been violated, and so far as the testimony furnishes any basis for a just conclusion, the defendant had no justifiable ground for his defense of the action.
Judgment for the plaintiffs.