61 Barb. 573 | N.Y. Sup. Ct. | 1872
The decision of the general terrp, when this case was last before us, was rendered on the ground that the contract on which the action ■was founded contemplated the formation of the corporation therein referred to by the defendants ; and that the neglect or refusal of the defendants to organize such corporation rendered them liable to the plaintiff for such damages as he might sustain in consequence of such neglect. The contract was with the defendants, and was-to sell to them “the patent held by- the plaintiff, and with the further agreement to make such conveyances as were necessary to carry the agreement into effect, immediately upon the organization of the company ; and in consideration thereof the defendants agreed to transfer to' the plaintiffj an amount equal to fifty thousand dollars of the capital stock of the company, and to pay five hundred
The rule of damages adopted by the court was erroneous. The amount to be paid was $500 in cash, and $50,000 in stock of the new corporation, for the' patent, and $10,000 in stock for the tools and materials. The court directed a verdict for the nominal amount of the stock. This' was erroneous. The plaintiff was entitled to damages for a breach of the contract. The amount depended on the value of the stock after the corporation was formed, to be proven by showing what such value' would have been, if the company had been formed, taking into consideration the property that was to be transferred, and also the fact that, by the breach of the contract, the plaintiff was released from the obligation to transfer the property. It may be that the stock would have been valuable, or it may be that the damages would.be only nominal. Whatever it was, was to be ascertained by the jury, from" the testimony. These principles are settled by the case of Thomas v. Dickinson, (23 Barb. 431.) In that case, the rule of damages was said to be the amount of the obligation to be delivered in payment. But there the plain.tiff had transferred to the defendant the property he had
There was evidence of an agreement to rescind the contract, which should have been submitted to the jury. The parties agreed to surrender the papers, and further, that they should thereafter be held only as security for the money that had been paid to the plaintiff.
The verdict should be set aside, and a new trial granted, costs to abide the event.
Ingraham P. J., and Geo. G. Barnard, Justice.]