Shaw v. Saranac Horsenail Co.

Decision Date18 December 1894
Citation39 N.E. 73,144 N.Y. 220
PartiesSHAW v. SARANAC HORSENAIL CO. et al.
CourtNew York Court of Appeals Court of Appeals

OPINION TEXT STARTS HERE

Appeal from supreme court, general term, Third department.

Action by James Shaw, as trustee, against the Saranac Horsenail Company and others. From an order of the general term (29 N. Y. Supp. 254) affirming an order of the special term modifying a report of a referee, the administrators of one Vilas, defendants, appeal. Modified.

In January, 1883, the Saranac Horsenail Company owed a large amount of debts, and its board of directors duly resolved to issue coupon bonds of the company to the amount of $30,000, of the denomination of $500 each, secured by mortgage upon its real estate, to raise money to pay such debts, and Andrew Williams was authorized to negotiate the bonds at a price not less than par and accrued interest. In pursuance of this authority, Williams, in May, 1883, sold to Parker, Foote, Ryan, and Purdy, the respondents upon this appeal, bonds amounting in the aggregate to $6,500, and received the full amount thereof; and no question is made in this proceeding that those bonds are valid and legal obligations for the full amount due thereon against the company. In the same year he sold to Town, Farrell, Moffett, and Ellis bonds to the aggregate amount of $7,000, and received full value for such bonds, and no question is made that the bonds were, in the hands of the persons to whom they were sold, valid obligations against the company. In 1885 the company was indebted to the Keeseville National Bank to the amount of $5,000, which indebtedness had been contracted for money actually received from the bank by the company between one and two years before; and the bank was pressing for payment of the indebtedness and for additional security, whereupon the note of the company was given, indorsed by Williams, and he delivered to the bank, as collateral security for the note, bonds amounting to $5,000. In the same year the company was indebted to the Iron National Bank of Plattsburgh, in the sum of $3,850, for money had by the company some time before; and a note was made by the company for that sum, and as collateral security thereto Williams delivered to the bank bonds of the company amounting to $4,000. About the same time the company was indebted to the Vilas National Bank of Plattsburgh for money had by the company some considerable time before; and, to secure that indebtedness, a note was given to it by the company for $7,250, and bonds of the company of the par value of $7,500 were delivered to the bank by Williams, as collateral security to that note. The company became insolvent in 1886, and afterwards the mortgage upon its real estate, given to secure its bonds, was foreclosed, and the real estate sold, and the proceeds of the sale amounted to about $10,000. There was a reference to a referee to determine how many bonds had been issued and were outstanding which were entitled to share in such proceeds. The referee, after hearing the parties interested, reported that all the bonds above mentioned, except those held by the respondents, belonged to the estate of S. F. Vilas, deceased, which is represented by his administrators, the appellants, and that all such bonds, to the extent of the interest of that estate in them, were entitled to share pro rata in such proceeds. Upon...

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6 cases
  • Investors' Syndicate v. North American Coal & Mining Co.
    • United States
    • United States State Supreme Court of North Dakota
    • June 4, 1915
    ...... authority had been conferred. Beyer properly intervened. Shaw v. Saranac Horse Nail Co. 144 N.Y. 224, 39 N.E. 73; Bosworth v. Allen, 168 N.Y. 159, 85 Am. St. ......
  • Hess Warming & Ventilating Company v. Burlington Grain Elevator Company
    • United States
    • United States State Supreme Court of Missouri
    • December 4, 1919
    ...... sell its bonds, this authorization does not include the power. to pledge. Shaw v. Saranac Horse Nail Co., 144 N.Y. 220. (4) The bonds were void because (a) in excess of the. ......
  • In re Hackett, Hoff & Thiermann
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • April 18, 1934
    ......The same principle is supported quite generally throughout the states. See Shaw v. Saranac Horse Nail Co., 144 N. Y. 220, 39 N. E. 73; First National Bank v. National Broadway ......
  • Reguera v. Calderon
    • United States
    • New York Supreme Court Appellate Division
    • May 11, 1967
    ...... (See Shaw v. Saranac Horse Nail Co., 144 N.Y. 220, 39 N.E. 73; Porges v. United States Mortgage and Trust ......
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