Hawley v. Uption

• Decision Date: 01 October 1880
• Citation: 102 U.S. 314,26 L.Ed. 179
• Parties: HAWLEY v. UPTION
• Court: U.S. Supreme Court

102 U.S. 314

102 U.S. 314

26 L.Ed. 179

HAWLEY v. UPTION.

October Term, 1880

ERROR to the Circuit Court of the United States for the District of Iowa.

This is an action brought July 25, 1873, by Clark W. Upton, assignee in bankruptcy of the Great Western Insurance Company of Chicago, Ill., to recover from Theodore Hawley the unpaid instalments alleged to be due on his contract to subscribe to the capital stock of that company.

The court, the case having been submitted to it upon the pleadings and proofs without the intervention of a jury, found the following facts:——

'The plaintiff is assignee in bankruptcy, as alleged in the petition.

'On the second day of January, 1871, Rossitur, agent of the Great Western Insurance Company, requested the defendant to take stock in said company.

'The defendant, on certain representations by Rossitur, signed the following paper or bond:——

"No.$03R] THE GREAT WESTERN INSURANCE COMPANY. [$200.

[Stamp.]

"Capital stock $500,000, with liberty to increase to $5,000,000. Stock non-assessable.

"Organized July 20, 1857, under act of legislature approved March 4, 1857.

"Know all men by these presents, that for and in consideration of ten shares of the capital stock of the Great Western Insurance Company of Chicago, Ills., received by me, I am held and firmly bound, and agree to pay the Great Western Insurance Company of Chicago the sum of two hundred dollars in instalments, as follows twenty-five per cent thereof upon receipt of stock certificate, twenty-five per cent in three months from date hereof, twenty-five per cent six months from date hereof, twenty-five per cent nine months from date, with interest ten per cent after due.

"CHICAGO, 7th Jan'y, 1871.

"THEO. HAWLEY. [SEAL.]

"Signed and delivered in presence of'——

'At the time the said bond or paper was issued to Hawley the latter paid Rossitur twenty-five dollars, and delivered to him the bond. It was not delivered on any particular conditions. It was delivered to an agent of the company's, namely, the said Rossitur.

'The company afterwards came into possession of the bond, and entered Hawley's name on their books as a stockholder, and published him in their publications as one of their stock-holders, Hawley having no knowledge of the publications. Hawley paid no other money, and no calls were made upon him prior to the bankruptcy.

'No certificate of stock was ever sent or delivered to Hawley, and he made no demand on the company for any certificate of stock.

'The bankruptcy of the insurance company was caused by fire in October, 1871.

'The defendant signed no subscription paper or any other paper than the bond above set out.

'On the foregoing facts and the pleadings judgment was rendered for the plaintiff. The judges were opposed in opinion on the following questions:——

'1st, Whether the delivery of a stock certificate under the above circumstances was necessary to constitute the relation of stockholder between the defendant and the insurance company.

'2d, Whether the above facts constitute a defence to the action.

'The judges being divided in opinion on the above questions, hereby certify such division to the Supreme Court, pursuant to the statute in such case made and provided.'

Mr. Galusha Parsons for the plaintiff in error.

Mr. C. C. Nourse, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

It cannot be doubted that one who has become bound as a subscriber to the capital stock of a corporation must pay his subscription if required to meet the obligations of the corporation. A certificate in his favor for the stock is not necessary to make him a subscriber. All that need be done, so far as creditors are concerned, is that the subscriber shall have bound himself to become a contributor to the fund which the...