Detroit Driving Club v. Fitzgerald

• Decision Date: 30 June 1896
• Citation: 67 N.W. 899,109 Mich. 670
• Court: Michigan Supreme Court
• Parties: DETROIT DRIVING CLUB v. FITZGERALD.

67 N.W. 899

109 Mich. 670

DETROIT DRIVING CLUB v. FITZGERALD.

Supreme Court of Michigan

June 30, 1896

Error to circuit court, Wayne county; William L. Carpenter, Judge.

Action by the Detroit Driving Club against William H. Fitzgerald to recover a sum alleged to be due plaintiff on a subscription by defendant to its capital stock. There was a judgment entered on a verdict directed by the court in favor of plaintiff, and defendant brings error. Affirmed.

E. T. Wood, for appellant.

Moore &amp Moore (Otto Kirchner, of counsel), for appellee.

MOORE J.

The plaintiff was organized under Act No. 22, Sess. Laws, 1883 and sued defendant to recover an unpaid subscription of stock. By direction of the court, the jury rendered a verdict in favor of the plaintiff. Defendant assigns error. In July 1893, D. J. Campau, after some talk with defendant, presented him with a paper reading as follows: "Whereas, it is proposed to organize a corporation for the purpose of promoting good fellowship among its members, by providing a clubhouse and pleasure grounds for their entertainment, where at all times they may meet for social intercourse, and further to encourage, by providing their proper facilities raising, improving, breeding, training horses, at meetings to be held at stated times in each year: Now, therefore, we, the undersigned, for the purpose of such organization, do hereby severally subscribe the sum set opposite our respective names, to its capital stock, and agree to pay the same to said corporation, in installments, as called for from time to time by the board of directors." The paper bore the signature of 20 persons at $1,000 each, and one at $2,500. Mr. Fitzgerald signed for $2,500. Mr. Campau claims that at this time he informed Mr. Fitzgerald they had organized the Detroit Driving Club; that the corporation expected to have a capital stock of $150,000; that $68,000 was then subscribed and that they were going ahead to acquire the grounds and buildings, and would not wait for the full subscription. Mr. Fitzgerald denied that he was told by Mr. Campau they were going ahead before the capital stock was all subscribed. The club afterwards bought grounds, put up buildings, and spent a large sum of money. August 9, 1893, an assessment of 20 per cent. was made on all subscriptions to the capital stock. December 5, 1893, a further assessment of 80 per cent. was made; and the president was directed to let contracts for buildings, and to proceed with the work necessary to hold a race meeting,-the cost not to exceed $100,000. After the 20 per cent. assessment was made, Mr. Fitzgerald did not pay it on his subscription, and, in a conversation with Mr. Campau, said his money was tied up, and had some talk with him to the effect that he had subscribed for more stock than he could take care of, and a little later wrote a letter reading as follows: "Detroit, Michigan, August 3, 1893. D. J. Campau, Esq., City-Dear Sir: I rather overreached myself when I subscribed for $2,500 of stock in the D. D., signed in the stringency. I was speaking to Mr. Vail to-day, and he thought I might reduce my subscription to $1,500, and then, after a while, when money is cheaper, subscribe for more stock, if I desire, and somebody else did not want it. If my subscription can be changed to the above amount, and you will advise me of the same, I will send you a check at once for $300. William H. Fitzgerald." Mr. Campau replied as follows: "Dear Sir: I answer of your letter of recent date, in regard to reducing your stock subscription in the Detroit Driving Club to $1,500.00, would say, if you will send your check for $300.00, being 20 per cent. assessment made on the stock, I will see that the other ten shares are placed elsewhere. Yours, truly, D. J. Campau." Mr. Fitzgerald sent his check for $300, and a certificate was issued certifying that he had "subscribed for fifteen shares of the capital stock of the Detroit Driving Club, at $100.00 per shares, amounting to $1,500.00, for which certificates of stock will be issued upon the payment of the amount subscribed, and the surrender of this certificate. The assessments paid are indorsed hereon,"-and indorsed with the $300 payment. Article 3 of the plaintiff's articles of association reads as follows: "The purpose or purposes of this corporation is to promote social intercourse amongst the members; to provide for them the convenience of a clubhouse, pleasure grounds, and proper facilities for improving, training, and exhibiting horses at meetings to be held at stated times in each year. The term of existence of this corporation is fixed at thirty years from the date hereof." Among the by-laws adopted by the association were the following: "Every member of the club shall pay an initiation fee of fifty dollars, excepting subscribers for five hundred dollars or more of the original capital stock of the corporation. All such subscribers, who take and pay for the stock thus subscribed for, will be exempt from the initiation fee for membership, so long as they continue to own and hold not less than five hundred dollars of said original capital stock in said corporation. A transfer or sale of any amount of said stock will not entitle...