Sears v. Kings County Elevated Railway Co.
156 Mass. 440
Mass.
1892
Check Treatment
Field, C. J.

Of the two exceptions taken by the defendant, the first has not been argued. The second exception relates to two rulings asked upon the question of recoupment. Of these requests the second ought not to have been given, because it does not in fact appear “ by the uncontroverted evidence that the defendant suffered from the plaintiff’s wrongful payment of the money to Kimball damages far in excess of the amount sued for,” as stated in the request. The exceptions recite that the defendant was a corporation “ organized under the laws of New York to build and operate an elevated railroad in Brooklyn, N. Y. No proof of the law of New York was made, and no proof was offered of its provisions, except as hereinafter stated. The capital was fixed at $1,000,000, and $50,000 was paid on the capital at the time of organization, Jan. 2, 1879, to the commissioners of rapid transit. The commissioners retained $5,150 for their services and expenses, and on Jan. 7, 1879, *448gave a check for the balance, $44,850, to the plaintiff, payable to his order as treasurer,” etc. The statutes of New York were not put in evidence, and we cannot take judicial notice of them. It seems that five per cent, of the capital stock was required to be paid to the commissioners of rapid transit, and that four persons, Kimball, Simpkins, Abbot, and Wooldredge, paid this sum of money to the commissioners under an agreement, as we infer, with Bond and Stone, that what was received back from the commissioners should be repaid to them. The directors, on January 15, 1879, voted to buy of Roy Stone certain rights in certain patents, and to pay him the sum of $994,850. This sum and the $5,150 retained by the commissioners make up the sum of $1,000,000. Stone testified that he first gave his check for $994,000 or $995,000 for the stock of the company, and that this check was given back to him in payment for the patents, but that afterward, in substitution for this transaction, he gave a check for $950,000, which we infer was returned to him, and that he drew an order on the treasurer for $44,850, payable to Moses Kimball, being “ for balance due me on elevated railway patents,” which the plaintiff, as treasurer, paid to Kimball, and he distributed among the four persons who contributed the $50,000. The check for $950,000 and this order together make up the amount of $994,850, which was agreed to be paid to Stone for the patents. The defendant complains that the treasurer violated his duty in making this payment. But according to the terms of the vote the money was due to Stone for the patents. The exceptions recite: “ It appeared that the original agreement was that one third of the capital stock was to be given to Simpkins, Abbot, Kimball, and Wooldredge, and that each of them received his proportionate part of that amount; one third was to be given to Bond and Stone, and one third was to be held as treasury stock.” We infer that Stone was regarded as a subscriber for 9,500 shares of the stock, which was considered as paid for by his check, which was handed back to him in part payment of the patents; Kimball, Abbot, Simpkins, and Wooldredge had paid $50,000, but through the order of Stone had received back $44,850, and they perhaps regarded the difference, namely, $5,150, as a contribution towards the capital stock. Apparently, no other subscriber to stock paid anything, *449“the holders” besides Kimball, Simpkins, Abbot, Wooldredge, Sears, Bond, and Stone “ having only small amounts for which they had paid no money, which had been put in their names by these seven, or some of them, to make up the number of subscribers required by law.” A transaction of this character ought to be forbidden by law, but, as the law of New York regulating the organization of elevated railway companies must be statutory, we do not know what the law was, or whether the transaction was in violation of that law. There was evidence from which the jury might find that the seven persons named above intended that this $44,150 should be paid to Stone in part payment of his patents. The other holders of stock might perhaps be considered as holding the stock, not for themselves, but for the persons who put it in their names. Upon this statement of the evidence, it is clear that the first of the rulings asked for on the question of recoupment ought not to have been given, because, if we knew the statutes of the State of New York, it might appear that the payment of $44,850 was not “ a violation of the plaintiff’s duty as treasurer,” under the vote of the corporation to buy of Stone the patents; and because the jury might find that all the persons having any beneficial interest in the stock of the corporation had authorized or ratified the payment. No exceptions were taken to the charge of the presiding justice. Exceptions overruled.