79 N.Y.S. 583 | N.Y. App. Div. | 1903
The defendant was a stockholder of the corporation known as the Rochester Lithographing & Printing Company. This company was formed May 10, 1887, and it was the result of the combination of two copartnerships,-—-Williard, Pitts & Moore and Geobel & Vredenburgh,—each of which had been engaged in business in the city of Rochester for some time. The chief part of the $50,000 capital stock of the corporation consisted of the properties of those two companies. The defendant purchased stock in the corporation in February, 1888, to the amount of $6,000, and later, when the corporation was on the verge of collapse, increased this original purchase to the amount of nearly $18,000, and became the president of the company. The plaintiff obtained a judgment against the corporation in November, 1890, but was unable to enforce the collection of the same by execution, as the corporation was then insolvent. This action was commenced, charging that the property which made up the assets of the corporation had been knowingly overvalued, and that the capital stock had not been fully paid up, as required by section 10, c. 40, Laws 1848, known as the “Manufacturers’ Act,” and in pursuance of which the corporation was organized; and that by reason of this failure the defendant was individually liable for the debt of the plaintiff. The defendant was not a stockholder at the creation of the company, and was not, therefore, a party to the original overvaluation of the property going into the corporation, if such overestimate in fact was made. When the defendant became a stockholder in the corporation, no certificate to the effect that its capital stock had been fully paid in had been filed in the office of the county clerk of Monroe county, but on the 27th of April, 1889, such certificate was verified by the defendant, as president of the company, with other directors and trustees thereof, and was filed on the 29th of that month. In December, 1889, the sum of $6,500 was subscribed by the incorporators, and paid into the treasury of the company. The case has been three times tried, resulting each time in a verdict for the plaintiff; but the two previous judgments were reversed by the court of appeals. Upon the first appeal in that court the merits of the vital questions involved were not considered. 158 N. Y. 475, 50 N. E. 289. Upon the second trial the defendant requested the court to charge the jury that, even if there had been an overvaluation of the property transferred to the corporation, if in fact such over-; valuation did not exceed the $6,500 subsequently paid into its treas
Among the assets which it is proved was transferred to the company was the good will of the two copartnerships of Geobel & Vredenburgh and Williard, Pitts & Moore, whose property became vested in the corporation. Upon the trial the defendant offered to prove by Mr. Vredenburgh the value of this good will. No objection was made to the competency or qualification of this witness, and in fact no specific objection at all was made to the reception of the evidence. He had already testified to his connection and familiarity with the business of his firm down to the time when it was absorbed by the corporation, and had given his estimate of the value of the tangible property transferred, and had testified that this did not include the good will of the business. He was a stockholder of the corporation, and testified that the customers of his firm, as well as of the firm of Williard, Pitts & Moore, continued along with the corporation, so that it derived the benefit of the business which had been developed by the preceding concerns. The business was carried on in the same building, and under largely the same active
The question for us to pass upon is whether it'was competent for a witness thoroughly conversant with the business and with its management in all its details to give his opinion of the value of the good will of the concern founded on his knowledge. In some way, concededly, this element of value may be ascertained. To prove the facts, and leave it for the jury to assess that valuation, might prove very unsatisfactory. They might not be at all familiar with the business, or competent to fix any estimate upon an asset which, in a given case, might be
During the trial it was sought in various ways to show the extent of the merchandise sales of Williard, Pitts & Moore from the formation of that firm, in October, 1885, until it became merged in the corporation, in May, 1887. This evidence was excluded, and, we think, erroneously. The evidence bore somewhat upon the value of the property itself, and certainly the extent of the sales may have affected materially the worth of the good will of the business. A like error is manifest where the defendant was excluded from showing the profits of the business of Geobel & Vredenburgh. It is to be understood at all times that the overvaluation of the property of the company is the pith of the controversy, and whatever tends to give light upon that subject within reasonable limits, either in enhancement or diminution of its value, is pertinent on that issue. It is to be remarked that the record in this case is running over with countless exceptions taken by the defendant, most of which are trivial and unimportant, and require no discussion by us. The defendant’s motion for a new trial on exceptions should be sustained, and a new trial granted, with costs to the defendant to abide the event.
Defendant’s motion for a new trial granted, with costs to the defendant to abide the event. All concur.