17 Barb. 581 | N.Y. Sup. Ct. | 1854
The plaintiffs cannot rely upon the admission in the answer, as proof that the defendant executed' the instrument set forth in the complaint. The defendant, in his second answer, in which he sets up his first special ground of defense, admits that he executed those instruments. But all the material allegations of the complaint had before been denied by the first answer ; and this admission was a mere confession, for the purpose of avoidance; and the plaintiffs cannot dismember a special plea, and take this confession as a general admission in the suit. Certainly not, whan he takes issue upon the plea. Were this so, every good special plea to the whole declaration, notwithstanding the general issue, would be an admission of the declaration generally, and would be a waiver of the general issue, and change the onus on to the defendant. (Harrington v. Macmorris, 5 Taunt. 228. Robins v. Maidstone, 4 Q. B. Rep. 811. Firmin v. Crucifix, 5 Car. & Payne, 97. Montgomery v. Richardson, Id. 247.) The plaintiffs, therefore, were under the necessity of proving that the defendant signed the subscription upon which they had declared.
He acknowledged the execution of the articles of association, and “ the papers thereto annexed,” which included the subscription ; that, if not in fact part of the articles, being then prefixed and must have been intended, as no papers were literally “ annexed.” This acknowledgment authorized the originals to be given in evidence. (Laws of 1833, ch. 271, § 9.) The copy of the articles certified by the secretary of state, were also admissible in evidence. (1 R. & 166, § 4. Laws of 1848, ch. 140, § 3. Laws of 1850, ch. 140, § 3. Peck v. Farrington, 9 Wend.
But if the subscription was not properly filed in the office of the secretary of state, such certificate could not make the copy primary evidence. (Bouchaud v. Dias, 3 Denio, 238. Dick v. Balch, 8 Peter’s R. 33; 2 Cowen Hill’s Notes, 1244. Jackson v. Leggett, 7 Wend. 377.) And there is no law requiring or authorizing a subscription to the stock of a railroad corporation, distinct from the articles of association, to be filed with the secretary of state. The articles and affidavit indorsed thereon, or annexed thereto, are to be filed.
But I am inclined to think, the subscription, so called, or first paper, was sufficiently proved, in this case. The caption of the first instrument reads thus : “ articles of association and that, and what are claimed to be the articles, bear the same date, were signed by the same persons, and at the same time; were acknowledged at one time; have but one certificate of acknowledgment ; were filed together; and, as appears by the certificate of acknowledgment, were then attached together. And the second one recites that “ the undersigned, being subscribers to the stock,” &c. They may be considered as one instrument, and were, no doubt', intended to constitute the articles of association. And if that were not so, as the second one was properly proved, and was affixed to the other, and therein the defendant stated that he was a subscriber; as there was no other subscription paper proved, the last paper naturally refers to the first, and admits it to be genuine.
The execution of these papers made the defendant liable to pay the amount subscribed by him. I had occasion, this term, to examine this subject in the case of the Fort Edward and Fort Miller Plank Road Co. v. Payne;
The defendant denies that he paid ten per cent when he sub
If the length of the road was misstated, as there is no pretense of fraud, or even of negligence, that is not a defense; and besides, the defendant himself joined in the statement.
The objection that stockholders were admitted to testify, I suppose to be answered by the case of Montgomery Co. Bank v. Marsh, decided in the court of appeals in December, 1852.
The defendant also insists, that, admitting he became bound by his subscription, he has been absolved from that obligation, by the alteration in the articles of association, and by the sale and transfer of the road. As I understand the evidence, the whole line of the railroad of the plaintiffs has passed out of the charge of the corporation. But if this was unauthorized, the corporation was not thereby ipso facto dissolved. (See Brinckerhoff v. Brown, 7 John. Ch. 217; Att’y Gen. v. Bank of Niagara, Hopk. 354; Ward v. Sea Ins. Co.,7 Paige, 294 ; Mickles v. Rochester City Bank, 11 Id. 118; Angel & Ames on Corp. ch. 22.) It has been decided in England, that one railroad corporation cannot lease its road, or give up the management of its line, to another, nor delegate the powers conferred by statute, without the authority of the legislature. Those acts are ultra vires. (Beman v. Rufford, 1 Sim. N. S. 550; S. C. 6 Eng. Law and Eq. R. 106. Great N. Cos. R. Co. v. Eastern Cos. R. Co., 9 Hare, 313; Winch v. Birkenhead, &c. Railway Co., 13 Eng. Law and Eq. R. 506; Shrewsbury and Chester R. Co. v. Shrewsbury and Bir. R Co., 1 Sim. N. S.
But the change of the articles of association in this case, presents a more difficult question. It is not claimed that this was not done pursuant to the provisions of the act which authorizes a railroad corporation, by agreement, to shorten its line of road, and change its termination, and reduce its capital; where the lines of two roads embrace the same line of location. (Laws of 1851, ch. 19.) Of "course it was not illegal to do so, and the corporation is not, in consequence, liable to any forfeiture at the suit of the people.
But the defendant contends that it is not binding upon him. That by reducing the capital stock down to a little more than one fifth of the original amount, and throwing up nearly a moiety of the road, another and different enterprise is substituted-for the one in which he engaged.
A mere neglect to make the whole of a road specified. in the articles of association, even without a legislative sanction, does not discharge the liability of a subscriber to pay for his stock; unless the powers and existence of the corporation have ceased in consequence of such neglect. It has been supposed a railroad corporation can be compelled, on the application of an. owner of land through which it was to pass, to complete its road. (Reg-
The case is certainly not free from doubt. In the case of the London and Brighton Railway Co. v, Wilson, and Same v. Fairclough, (6 Bing. N. C. 135,) the court refused to let the defendant amend, and plead that the calls were made for other purposes than those warranted by the act of parliament; and that there had been deviations in the line of railway, and that the calls were made to carry on the railway after such deviations» That however was not an alteration of the constitution of the company, nor a deviation by legislative sanction. In another
But on the other hand, there are many cases that seem to favor the defense. In Lond. and Brighton R. Co. v. Wilson & Fairclough, the statute, in terms, created a positive indebtedness. In Ffooks v. London Spc. Railway Co., some of the plaintiffs had acquiesced. And the lord chancellor, in Graham v. Birkenhead &c. Railway Co., (supra,) stated the general doctrine, (that parties who have subscribed their money for óné purpose, are not to be told that the directors or a majority of the company, are of opinion, that it would be very advantageous to employ it for another. And again, “every proprietor when he takes shares,” said Jervis, 0. J., “has a right to expect that the conditions upon which the act was obtained will be performed; and it is no .sufficient answer to a shareholder expecting his dividend, that the money has been expended upon an undertaking which at some remote period may be beneficial to the line.” (11 C. B. 811.) And this doctrine sustained the defense of a subscriber, in an action at law for calls, in Hartford and N. Haven Railroad Co. v. Croswell; where the alteration had received the sanction of the legislature. (5 Hill, 383.) And has often been recognized and acted upon. (Middlesex Turn. Co. v. Swann, 10 Mass. R. 384. Same v. Locke, 8 Id. 268. Ang. & Ames on Corp. 483. Livingston v. Lynch, 4 John. C. 573. Bagshaw v. Eastern U. R. Co., 2 Man. & G. 389. S. C., 7 Hare, 114. Mount v. Shrewsbury and R. Co., 13 Beav. 1. Colman v. Eastern Co’s R. Co. 10 Beav. 1. McGregor v. Official Manager of Deal &c. R. Co., 18 Eng. Law and Eq. R,
Hand, Cady and James, Justices.]
Judgment for plaintiff.
C. L. Allen, J., being a stockholder, took no part in the decision.
Ante, p. 567,