Ashe v. Johnson's Adm'r.

• Decision Date: 30 June 1855
• Citation: 55 N.C. 149,2 Jones 149
• Parties: RICHARD J. ASHE v. JOHNSON'S ADM'R. AND OTHERS.
• Court: North Carolina Supreme Court

2 Jones Eq. 149

55 N.C. 149

RICHARD J. ASHE

v.JOHNSON'S ADM'R. AND OTHERS.

Supreme Court of North Carolina.

June Term, 1855.

Where to a bill for a special injunction, the defendant, who is an administrator, in his answer makes a formal denial of the matters alleged “according to the best of his knowledge and belief,” and also alleges new matter in reply to the plaintiff's equity, the Court will not dissolve an injunction previously ordered:

As, where a plaintiff alleges that the defendant was to take certain stock off his hands, whose administrator says he does not know as to the agreement, but suggests if it was so, plaintiff was to work in company with defendant's intestate, and was to be paid for such work not by intestate, but by the plaintiff's own labor.

Where one of two defendants has agreed to do a specific thing, for the benefit of the plaintiff, and the other defendant is the holder of a covenant under which it is to be done, also is the holder of the fund out of which compensation is to be made, and is about to part with the fund without making the compensation, the plaintiff has ground for going into a Court of Equity to restrain it from being put out of his hands.

Stocks in a recently chartered Rail Road Company, are to be viewed very differently from government stocks in England, which have a value in the markets of that country readily ascertainable.

APPEAL from the Court of Equity of Orange County from a decretal order dissolving an injunction.

Badger and Phillips, for the plaintiff .

J. H. Bryan, for the defendants .

PEARSON, J.

For the purpose of inducing individuals to subscribe for the amount of stock necessary to secure the charter, the gentlemen who felt the deepest interest in the success of the enterprise, and to whose exertions the North Carolina rail-road owes its existence, in their speeches and in the conventions which they procured to meet, held out the assurance that the company, when organized, would take care to relieve the subscribers of their stock by requiring those who contracted to do work on the road, to take stock in payment of one half of the amount of the price of their work.

The company, at its first meeting, instructed the directors to carry into effect the assurances which had been held out to the subscribers for stock, and in the language of the company in its answer, “the substance of these resolutions, passed at different times and conventions, was, that in letting out the contracts, the contractors were to be required to take stock as far as it was practicable to get them to do so.”

In pursuance of these instructions, the president and directors, in the advertisements for letting out contracts, made this stipulation; the contractors “receiving in payment on their contracts, one-half in stock of the road, the other half in cash.”

At the letting of contracts in Hillsborough, Johnson, the intestate of the defendant Jones, proposed to contract for the grading and culverts upon sections 17, 18, 19, 20, of the second division of the road, taking in payment 40 shares which he had subscribed for, and 40 shares which William A. Graham had subscribed for; but he was informed that 80 shares would not equal one-half of the amount, and that according to the terms of the letting, he could not get the contract, unless he took more stock. Accordingly he entered into a contract which contains, among others, this clause, to wit, “one-half to be paid in cash, &c., the other half to be applied in payment of 40 shares of stock subscribed for by said Johnson; 40 ditto subscribed for by William A. Graham; 10 ditto which Graham takes for Edmund Strudwick, and the balance to be applied to the payment of instalments due upon the stock of Richard Ashe, or so much as may be necessary to make, with the foregoing, one-half of the whole contract.”

Johnson, with the assistance of Graham, who furnished a number of hands &c., completed his contract; and the amount to which he is entitled to be paid, according to the terms of his contract, is $24,000 (in round numbers.)

The plaintiff insists that one-half of this sum ($24,000) was to be paid in stock; and admitting $9,000 to be first applied to pay for the stock of Johnson, Graham and Strudwick, there remains a balance of $3,000 to be applied to the payment of his stock. He alleges that he had taken stock to the amount of $8,000, and that Johnson, finding he could not get the contract for which he had made proposals, without having more stock than he and Graham owned, agreed with him to take of his stock the amount that might be necessary to make up the deficiency, and that in pursuance of this agreement, the contract was entered into with the clause above set out. He says, after this agreement with Johnson, he rested easy, under the belief that he had been relieved from a part of his large subscription, and that Johnson was to be substituted in his place and was to take the stock and pay for it, under his contract. He was afterwards surprised to find that Johnson was not disposed to carry out this agreement in good faith, and that the company intended to pay over to Johnson the amount due under his contract without retaining for any part of the stock which the plaintiff had subscribed for, and which Johnson had agreed should be paid out of the funds in the hands of the company; or in other words, which Johnson had agreed to take off his hands. The prayer is, that stock standing in the name of the plaintiff, corresponding with one-half of the excess due on the contract, shall be paid for out of the funds in the hands of the company and be transferred from the plaintiff to the defendant Johnson; that an account be taken to ascertain the true amount; and in the mean time, that the company be enjoined from paying over, and Johnson from receiving, the funds still remaining in the hands of the company.

The answer of the company admits the general facts alleged in the bill, but denies any knowledge of the terms of the private agreement, between the plaintiff and Johnson, and avers that upon being notified of the misunderstanding between them as to the terms of their agreement, the company made known to them an intention to pay over the fund to Johnson, and let them “““fight it out.”

The company was induced to take this course because it was known to the president and the chief engineer, who made the contract with Johnson, that he was at the time, excited by ardent spirits,...