25 N.Y.S. 19 | N.Y. Sup. Ct. | 1893
In December, 1889, the defendant signed, with Egbert W. Knapp, Norris Winslow, and two others, the original certificate of organization of the ‘Winslow & Knapp Lumber Company,” in which it was stated that he was one of the trustees of such corporation. At the same time he signed with the same parties an agreement whereby he agreed to take 30 shares of the capital stock of the Winslow & Knapp Lumber Company, and pay therefor the sum of $100 per share, “when said company is duly organized, and we are called upon for such payment by the trustees of said company.” On the trial of this action, he testified that he understood the paper was for the purpose of organizing a company, but
The relation of stockholder to a corporation depends entirely upon contract, and, to establish it, it must appear that the minds or" the parties met; that the defendant agreed to become a stock holder in the corporation, with the privileges and responsibilities of such relation; and that the corporation accepted him as such. Glenn v. Garth, 133 N. Y. 31, 30 N. E. Rep. 649, 31 N. E. Rep. 344; Mor. Corp. (2d Ed.) §§ 24, 46. Section 10, c. 40, of the Laws of 1S48, under which this action is brought, imposes its liabilities only against the stockholders of a corporation; and the plaintiff is therefore required, in order to maintain his action, to establish the fact that the defendant was a stockholder of the corporation at the time his debt was contracted. This he' could only do, within the authorities above cited, by showing that such a contract, eilher express or by implication, had at some time been made between the defendant and the corporation. If the only evidence of such a contract was to be found in the fact that the defendant had signed the original certificate of organization, had acted as a trustee of the company, had indorsed over the two certificates of stock made out to him, and had frequently declared himself to be a stockholder, I should say that nevertheless 'it was a question of fact whether, under all the circumstances, and in the light of his explanations, he had ever actually made a contract with the company, by which he had agreed to become the owner of any of its shares of stock. But when we take into consideration- the agreement signed by him and the other corporators, whereby he agreed to take and pay for 30 shares of such stock, a very serious question is presented,—whether the written and conceded evidence does not contain all the elements of the needed contract. The subscription to take the 30 shares, alone by itself, would not constitute a contract with the company. Dorris v. Sweeney, 64 Barb. 636; Railroad Co. v. Curtis, 80 N. Y. 219. But it has been held by a general term of this court, in Dorris v. French, 4 Hun, 292, that when such an agreement is consummated, by signing the certificate of organization. it becomes one transaction, and is equivalent to subscribing formal articles of association, and the agreement may be enforced by the company itself. So, in Warehousing Co. v. Badger, 67 N. Y. 294, the defendant subscribed the certificate of organization, and placed opposite his name the number of shares taken by him; and it was held that such was a binding subscription for stock, and made him a stockholder in the company. The statute does not require that the number of shares taken by a subscriber should be stated in the certificate, nor does it require that any subscription for stock should have been made at all before filing such certificate. Mor. Corp. § 33. Therefore, if a statement made in such certificate is a sufficient contract with the company, it would seem that a
But the defendant claims that, even though the defendant did become a stockholder, it is not disputed but that he assigned his stock before the plaintiff’s debt was incurred, and hence he cannot be held liable under section 10. Section 25 of the act provides that a book shall be kept by the officers of the company, containing the names of the stockholders, etc., and that no transfer of stock shall be valid, etc., unless entered upon such book. It is not claimed that the transfer by the defendant was entered upon such book, and therefore, by the well-settled law of this state, Ms assignment was not effectual to relieve him from the liabilities imposed by section 10. Shellington v. Howland, 53 N. Y. 372, 376. In Johnson v. Underhill, 52 N. Y. 203, 209, it is said that both the assignor and assignee are liable to creditors until the transfer has been entered on the books. The cases cited by the respondent’s counsel upon this question do not conflict with the above. It has always been held that as between the parties to the transfer, and even as between the parties and the company, an assignment may be valid to transfer a good title without being entered on the books. Bank v. Colwell, 132 N. Y. 250, 30 N. E. Rep. 644; Cutting v. Damerel, 88 N. Y. 410; Isham v. Buckingham, 49 N. Y. 216. But, as against a party who does not stand in the attitude of one subrogated to the rights of the company, but is suing under a statute, that creates an original liability, and renders a stockholder liable whether he is a debtor to the company or not, as does the section 10 in question, no assignment is operative until it has been entered as required by section 25. The company can waive nothing, as against a creditor so suing.
Our conclusion is that the court erred in submitting to the jury the question whether the defendant ever became a stockholder in