30 N.Y. 64 | NY | 1864
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *66
One ground of defense interposed is the statute of limitations, and that has no application, except to the payment of the stock. It is contended, on the part of the defendant, that such payment was made by Stover in his lifetime by the delivery of the flax, and that such purchase of the flax by the company from Stover, produced an indebtedness on his part to the company for the stock. But it is to be borne in mind that Bradshaw, the treasurer of the company, testified that in fact such application of the mutual indebtedness was not made until the 23d day *67
of March, 1859, when a settlement of the indebtedness of the company to Stover for the flax purchased, and his indebtedness to it for the stock, was made between the company and the plaintiffs as the representatives of Stover, and a balance being found due to the plaintiffs, the same was paid to them. But a conclusive answer to this view is found in the statement of the case, that this stock was paid for by the estate of Stover. This necessarily implies that it was not paid for by Stover in his lifetime, but by his representatives after his death, and there is no ground for any suggestion that they paid for it at any other time, or in any other manner than by the adjustment and settlement of accounts on the 23d of March, 1853, as detailed by Bradshaw. The defendant's liability did not accrue until the stock was paid for by Stover, or his representatives; and the statute consequently did not commence to run until such payment. It being made as we have seen, on the 23d of March, 1853, and this action having been commenced on the 22d of March, 1859, this ground of defense has entirely failed. Neither does the statute of frauds interpose any difficulty in the way of the plaintiff's recovery. He did not become a purchaser of the stock from their intestate. The authority given by the defendant was, that Stover should subscribe, take and pay for the stock in his, Stover's name, and that the defendant was to own the one-half part thereof. This arrangement constituted Stover his agent for those purposes, and the law implies a promise on his part to repay to Stover whatever sum he should advance and pay for the defendant's stock. Although the stock stood in the name of Stover, it became and was the defendant's stock. By virtue of this arrangement he became a stockholder in the company, and as such, liable to contribute and pay towards the discharge of the debts of the company, an amount equal to the amount of the stock so taken and owned by him. (Burr v. Wilcox,
Stover was liable to the extent of the stock standing in his name, for the debts of the company. The creditors of the company under the authority of Burr v. Wilcox (supra), could also have compelled the defendant to contribute to the amount of stock actually owned by him, although standing in Stover's name. No question appears to have been made on the trial, that the company was insolvent, and that the amount held by each stockholder was necessary to be contributed for the payment of its debts. The payment was made by the agent on account of his principal, and no point was made on the trial, that the defendant was not liable to reimburse the same, if he was adjudged to be the owner of the stock purchased under the arrangement proven. We think clearly he was, and that he was legally bound, not only to pay the sum advanced in payment of the stock, but also the amount paid by the plaintiffs to discharge the statute liability, created in favor of the creditors of the company.
We arrive at the conclusion, therefore, that the judgment should be affirmed.
Concurrence Opinion
The agreement, to enforce which this action was brought, seems to have been that the testator should subscribe for $1,000 of the capital stock of the Diamond Mills Manufacturing Company, one-half of which should belong to the defendant, the testator to hold the same and receive the dividends thereon, the defendant to pay the interest annually on the $500, and when the intestate wanted the $500 he was to notify the defendant, and if he did not pay, the intestate should sell the same, and the defendant would pay the difference between the sum received on such sale and the par value of the stock.
A few years after the intestate subscribed for the stock, the company became insolvent, and the stockholders were *70 called on to pay an amount equal to the stock held by them to pay the debts of the company, and the intestate paid $1,000, and $500 of that sum is also claimed in this suit. It was a part of the bargain that the agreement should be put in writing, but it never was.
By the contract the intestate paid for the defendant, and at his request, $500, which was to be repaid by the defendant. One-half of the stock subscribed for became and was the property of the defendant, although it stood in the name of the intestate. It was tendered to the defendant before suit brought, and thus the liability of the defendant perfected, so far as the ownership of the stock was concerned.
By the contract the intestate was bound to sell the stock, and in that way reimburse himself so much of the amount paid as the stock would bring on the sale. No sale was made, and hence it is claimed a condition precedent to a recovery in this case has not been performed.
But it clearly appears that the company had become insolvent, and its stock utterly worthless; there was nothing to sell. The defendant was clearly liable for one-half the amount paid for the stock.
The intestate, being the nominal owner of the whole stock, was liable to the company, or the creditors, to pay $1,000 in satisfaction of the debts of the company. On the facts proved, there is no reason to doubt the power of the creditors to enforce the payment of this sum; and that being so, the intestate was not bound to wait until he was sued and judgment recovered, before he paid.
But it is said that the intestate was a trustee of the defendant's share of the stock, and hence not liable to be sued for it. Neither the company nor its creditors had any notice of any trust, and whether the intestate might have paid his own half and on informing the company or creditors of the manner in which he held the defendant's share, have given it or them a right of action against the defendant, *71 is not very important. While it stood in the intestate's name he was liable for the whole; and he has paid $500 for the defendant's benefit, which the defendant was equitably bound to pay.
It is just and right that executors, administrators, guardians of minors, and others, trustees of express trusts, should not be liable for debts of a corporation in which they hold stock in their fiduciary capacity. But there is no reason why a person holding stock as the intestate held that belonging to the defendant, should be exempt. The statute exemption does not reach the case.
It is said the contract as to the stock was never binding because by its terms the agreement was to be put in writing, and it was not. Conceding that the defendant might have insisted on the performance of this condition, it was competent for him to waive it; and he seems to have repeatedly recognized his liability on the contract, although it had never been reduced to writing and signed.
After a careful consideration of all the points raised by the defendant's counsel, I can discover no grounds on which the judgment can be reversed. It is therefore affirmed, with costs.
JOHNSON, J., was in favor of a reversal. All the rest of the judges being for affirmance, judgment affirmed. *72
