Boston & Albany Railroad v. Pearson

• Decision Date: 02 March 1880
• Citation: 128 Mass. 445
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Boston & Albany Railroad v. John H. Pearson & others

128 Mass. 445

Boston & Albany Railroad v. John H. Pearson & others

Supreme Court of Massachusetts

March 2, 1880

Argued November 13, 1879

Suffolk. Contract upon an account annexed against the defendants, as "copartners under the firm and style of the New England Express Company," for work done by the plaintiff for said company in 1868. Writ dated April 1, 1872. Pearson alone defended, and filed an answer containing a general denial.

At the trial in the Superior Court, before Colburn, J., without a jury, the defendant contended that the New England Express Company was a corporation organized in 1867, under the laws of the State of New York, and, as evidence of the laws of that state, put in the N. Y. Sts. of 1849, c. 258; 1851, c 455; 1853, c. 153; ^[*] and the case of Westcott v Fargo, 61 N.Y. 542. The plaintiff put in evidence, on this point, the N. Y. St. of 1854, c. 245.^[+]

The defendant also contended that, if the New England Express Company was a partnership, and not a corporation, Pearson was not a member of it, and objected to evidence admitted to prove that he was a member; and also objected to the allowance of certain items of the account annexed.

The judge found for the plaintiff; and reported the case for the determination of this court. The facts appear in the opinion.

Judgment for the plaintiff.

E. Avery & H. G. Parker, (G. W. Estabrook with them,) for the defendant.

G. S. Hale & S. C. Darling, for the plaintiff.

Morton, J. Colt, J., did not sit. Soule, J., absent.

OPINION

Morton, J.

The question whether the New England Express Company, organized under the laws of the State of New York, was a corporation or a copartnership, has been before the courts of this and other states in several cases; and it has been uniformly held that it was a copartnership, and not a corporation. Taft v. Ward, 106 Mass. 518, and 111 Mass. 518. Bodwell v. Eastman, 106 Mass. 525. Frost v. Walker, 60 Me. 468. See also Westcott v. Fargo, 61 N.Y. 542; Witherhead v. Allen 3 Keyes 562. The provisions of the statutes of New York in relation to such copartnership, that suits shall be prosecuted in the first instance against the officers of that association, are provisions respecting the remedy; of local operation, not binding here; and the liability of the individual partners may be here enforced according to the laws of this Commonwealth. Taft v. Ward, 106 Mass. 518. Gott v. Dinsmore, 111 Mass. 45. It follows that the defendant Pearson is liable in this action, if he was a member of said copartnership at the time the plaintiff's bill was contracted.

Upon this point, the following evidence was introduced at the trial. In October 1867, a meeting of the persons whose names are subscribed to the articles of association was held in New York, at which it was "resolved, that we organize ourselves, and such others as shall join hereafter, into a joint-stock association, to be known and designated as the New England Express Company, under the laws of the State of New York, and that we adopt and sign the articles of association as submitted and read by the secretary and hereafter subscribed." The articles of association were signed at said meeting, and it was also resolved "that the subscription list to the capital stock of the said company be opened at once," and a form of subscription was adopted, which, after giving the name of the company, and the names of officers, stated the capital stock at $ 2,500,000, and proceeded as follows: "We hereby severally subscribe for the number of shares of the capital stock of the New England Express Company, set opposite our respective names, and agree to pay to the treasurer of the said company five per cent on every share of one hundred dollars so subscribed for, within ten days from the time of making such subscription; and to pay such further calls, at such time and in such amounts as may be made by the company, in pursuance of its articles of association; and thereupon, and in consideration thereof, the said company is to issue to us, severally, its stock for the amount so subscribed. And we hereby severally authorize and direct the secretary of said company to sign our names to the articles of association of said company." Copies of this subscription paper, together with a prospectus, were circulated, and subscriptions from a large number of persons, amounting to forty-five hundred shares of the par value of one hundred dollars each, were obtained. Among other persons, the defendant Pearson, in the fall of 1867, subscribed for fifteen shares, and, in the summer of 1868, he paid the five per cent mentioned in said subscription paper. In the summer of 1868, the said company, through its executive committee, commenced and entered upon the express business, and, in the course of that business, made the contract with the plaintiff upon which this suit is brought.

Upon this evidence, it was competent for the presiding justice of the Superior Court to find that the defendant was a member of the copartnership, and as such liable in this action.

The paper signed by the defendant was an absolute subscription for fifteen shares of the capital stock of the New England Express Company. It contained no provision that it was not to take effect until the whole of the contemplated capital of two million five hundred thousand dollars was subscribed, or the performance of any other condition. It cannot be construed, as contended by the defendant, to be a mere promise to take stock in a company thereafterwards to be formed. The company was already formed and organized under the laws of New York. Upon examining the articles of association and prospectus, it is clear that it was not contemplated that the formation of the company, or its entry upon active business, was to be delayed until the whole of the capital was taken. The ninth clause of the prospectus declares that the company "is organized with a capital stock of two million five hundred thousand dollars, in order to meet the wants of its business as it extends, and as far as possible to distribute the capital among business men." In the tenth clause, it is said: "It will be seen that a relatively small cash capital, and...