Daley v. People's Bldg., Loan & Sav. Ass'n
| Decision Date | 28 February 1899 |
| Citation | 172 Mass. 533,52 N.E. 1090 |
| Parties | DALEY v. PEOPLE'S BUILDING, LOAN & SAVINGS ASS'N. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
J.W. & C.R. Cummings, for plaintiff.
C.M Elliott and H.L. Phillips, for defendant.
This is an action upon a covenant to pay $100 a share, five years from date, contained in a certificate that the plaintiff is a shareholder in the defendant corporation. At the trial the defendant offered evidence that there were withdrawals of other members on file, that the corporation had suffered losses since the certificate was issued, and that the directors had taken steps to reduce the assets; the object being, of course, to show that the corporation had not funds applicable to the payment of the alleged debt. The evidence was rejected. The defendant also moved for a nonsuit on the ground that by the conditions of the contract any action brought by a shareholder was required to be brought in the county of Ontario, in the state of New York. This was refused. The plaintiff had a verdict, and the case is here on exceptions.
As we understand that a decision upon the first point mentioned is likely to dispose of the case, we shall confine ourselves to that, and shall not decide the second, although, if we were prepared to assent to the defendant's contention without further consideration, it would be logical to dismiss the plaintiff to New York. Compare Nute v. Insurance Co., 6 Gray, 174-184, with Greve v. Insurance Co., 81 Hun, 28, 30 N.Y.Supp. 668.
With regard to the evidence offered, the plaintiff takes the preliminary objection that it does not appear what the defendant expected to prove. Shinners v Proprietors, 154 Mass. 168, 169, 28 N.E. 10. But the rule referred to is a rule of substance, not of form. There must be reasonable ground to believe that the excepting party has been harmed by the exclusion of a question, but there need not be a formal tender of proof. In this case the series of questions put and excluded showed the defendant's purpose and expectation so clearly that it would be unjust not to deal with the offer of evidence on its merits.
On the merits the plaintiff's position is that he has an absolute covenant, and that that is the end of the matter. But we are of opinion that the case cannot be disposed of so simply. By the express words of the certificate, the sums promised are "payable in the manner and upon the conditions set forth in the articles of association and by-laws and terms and conditions printed on the back of this certificate." By the law, and without express words, the contract is subject to the statute under which the defendant is incorporated, and will be construed with reference to it. Hutchins v. Mining Co., 4 Allen, 580, 582; 1 Thomp. Corp. §§ 1136, 1137. The exceptions state that this statute was put in evidence, and we assume that it was intended that we should refer to it.
Upon looking at the statute (Laws N.Y.1851, c. 122, § 1), we find that the final purpose of such association is stated to be that "of accumulating a fund to be returned to its members, who do not obtain advances as above mentioned, when the funds of such association shall amount to a certain sum per share, to be specified in the articles of association." See, also, Id. § 7. The seventeenth article of association provides that "whenever the dues paid and dividends declared shall equal the par value of the shares held by any shareholder said shares of stock shall be canceled," and the shareholder "shall be entitled to receive *** the par value of the shares named *** and no more." The sum specified in the covenant is the par value of the shares, and,...
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