71 Conn. 207 | Conn. | 1898
The defendant subscribed for five hundred shares of the capital stock of the Yale Brick Company, adding to his name the word “trustee.” Nothing has ever been paid on these shares by the defendant or any one else. Afterwards the company was formally organized, and the defendant was chosen one of the directors and its secretary and treasurer; and he has at all times been active in the affairs of the company. This subscription and the organization of the company took place on the 14th day of October, 1892. On the same day the defendant, the other directors of the company acting with him, made, subscribed and swore to a certificate of the organization of the said company, and filed the same in the office of the secretary of this State and with the town clerk of the town of Berlin, and also caused the same to be published in a newspaper in Berlin. In that certificate this subscription is stated to be one of the subscriptions to the capital stock of said company, as indeed it must be, because otherwise the whole of the capital stock is not subscribed for. In his defense the defendant averred that he made the said subscription as the trustee for and with the authority of the said corporation, and that he was not personally liable on the same. The court, on demurrer, held this to be a good defense to the action brought by the plaintiff.
This subscription was made before the corporation was organized. It is a little difficult to see how it could at that time appoint a trustee for any purpose.
But as to the trusteeship of this subscription there is another and still stronger objection. It was not a bona fide subscription. The statute, General Statutes, § 1947, forbids any joint stock corporation to commence business until all its capital stock shall be subscribed for by bona fide subscribers. A bona fide subscriber means a bona fide subscription, that is, a real subscription, one that will in fact bring to the corporation the amount of capital which the subscription denotes, and upon which its creditors and all persons
A corporation has at its organization no property other than the subscriptions to its capital stock. From the nature of things it can have no property of its own separate from the subscriptions. A subscription to its capital stock made by a trustee, if it does not bind the trustee but only the corporation itself, would not be a bona fitde one. Such a subscription could not bring to the corporation any real capital. This subscription was one which the corporation as matter of fact could not have made, because at the time it was not organized so that it could appoint a trustee. And besides, it was a subscription which as matter of law it was forbidden to make. It did not and does not bind the corporation. Crandall v. Lincoln, 52 Conn. 73, 94; Cook on Stock and Stockholders, §§ 199, 251.
Did this subscription then bind the defendant? It is said in 1 Swift’s Digest, side page 330, that “ whenever a person signing a contract makes use of an addition, such as Treasurer of the Jockey Club, Guardian, Executor, or [the title] of any office, civil or military, in which he has no power to bind another, the contract will be binding on himself, and the addition rejected as surplusage.” Where an agent contracts for and on behalf of an irresponsible principal, that is, a principal who has no legal capacity, then the agent is responsible personally. 1 Amer. & Bug. Ency. of Law (2d ed.), 1122. “ It is elementary law that a agent must so contract as to bind his principal, or he will be himself bound.” Hall v. Bradbury, 40 Conn. 32, 37; Pierce v. Johnson, 34 id. 274. It is always presumed that persons intend to do effectually that which they contract; and where there is a conflict of construction, the parties are presumed to adopt that construction most favorable to the performance of their engagement. Therefore where the only way of enforcing a contract entered into by an agent is by making him liable, his liability will be assumed, provided it does not appear that it was intended in the tr’anaavticn that b» ahmld not be liable. Wharton on Agency, § 523; Kelner v. Baxter, L. R. 2 C. P, 174, 183.
The case of Russell v. Bristol, 49 Conn. 251, is not an authority in favor of the defendant’s contention. In that case the defendant, Mr. Bristol, had, after the capital stock of the corporation had all been taken, subscribed for some additional stock, affixing to his name the words, “ Treasurer, in trust.” At a later time the organization of the corporation was fully completed. After such complete organization and while the corporation was wholly solvent, it dealt with Mr. Bristol on the basis that he was not the owner of the said shares at all, but that the corporation was itself the owner of them. As between the corporation and Mr. Bristol, such dealing was a ratification of the original subscription and cured any infirmity there was in it. The subscription was then vacated by
The defendant claims that the facts of this case do not show a cause of action against him, for the reason that the Court of Probate had made no order in the premises according to the provision of § 519 of the General Statutes; and he cites the ease of New Haven v. Whitney, 36 Conn. 373. That was a case where the charter of the city of New Haven was under discussion. The charter of a city is an enabling Act, and when in such an Act an authority is given which would not exist except for the Act, and the Act prescribes that a thing shall be done in a particular way, there is an implied prohibition against doing that thing in any other way. Ex-pressio unius, exclusio altering. But when the power to do a thing exists and may be exercised according to the usual methods of law or equity, and the statute is only by way of regulation or enlargement of the power, then there can be no implied prohibition of the power, or to the way it is to be enforced. Section 519 is this kind of a statute. The insolvent law provides that all the property of the debtor shall vest in the trustee, and that the trustee may sue in his own name for choses in action. Hart v. Stone, 30 Conn. 94; Stanton v. Lewis, 26 id. 444. The case of Mann v. Cooke, 20 Conn. *178, *187, was a case in which the receiver of an insolvent corporation sued to recover the unpaid balance of a subscription to the capital stock of the corporation. In deciding that case this court said, by Ch. J. Chotbch ; “ It
It is further urged on behalf of the defendant, that no action can be maintained against him for the reason that no call has been made by the Court of Probate. The purpose of a call upon the subscribers to the capital stock of a corporation, whether made by the directors of the corporation itself or by the trustee in insolvency, who for this purpose has much the same powers as the directors of the corporation, or by the Court of Probate, is to adjudge that some part or the whole of the unpaid subscription is needed to pay the debts of the corporation, and to give notice to those subscribers who have not paid, of the amount they are to pay and of the time when they are to pay it.
The finding in this case shows that the defendant is the only subscriber to the stock of the Yale Brick Company whose subscription has not been paid in full; and that the plaintiff before the bringing of this action made demand on him for a sum sufficient to pay the indebtedness of the corporation. In strictness, perhaps, he ought to have stated the precise amount needed. Instead of this he asks generally for enough
The plaintiff represents the creditors of the insolvent corporation. His duty is to pay these creditors whatever the corporation owed to them, so far as its assets will enable him to do so after paying the expenses of the insolvency proceedings. He cannot collect of a delinquent subscriber to its stock any more than is needed for this purpose. The defendant claims that what this amount is should be specially set out in the complaint. But that is a matter to be proved. A plaintiff is never obliged to prove more than the substance of his complaint. In this case the plaintiff claims to recover the whole amount of the defendant’s unpaid subscription. Under that claim he may recover so much (not exceeding the whole) as the proof shows is needed to pay the creditors in full, together with the expenses of the settlement.
We think there was error in sustaining the defendant’s demurrer to the amended reply to the second defense.' That demurrer should have been overruled. The matters set forth by the plaintiff in the complaint and in the reply to the second defense, if proved, would entitle the plaintiff to recover. For the purpose of proving these matters the inventory and the commissioners’ report would be admissible; Bassett v. McKenna, 52 Conn. 437; as well as the evidence offered by the plaintiff to prove that the assets in his hands were not sufficient to pay the expenses of the settlement of the estate.
There is error and a new trial is granted.
In this opinion the other judges concurred.