Leigh v. Chattanooga, R. & C.R. Co.
| Decision Date | 01 April 1898 |
| Citation | 30 S.E. 381,104 Ga. 13 |
| Parties | LEIGH v. CHATTANOOGA, R. & C. R. CO. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. One who subscribes for capital stock in a railroad company under a contract entitling him to a certificate therefor upon payment of his subscription may, in defense to an action by the company to recover the amount thereof, set up that it after receiving his subscription, had sold and delivered all the stock it was legally entitled to issue, and had thus placed itself in a position where it could not comply with its part of the agreement.
2. Such a defense is not, however, established by evidence showing that the company entered into an executory contract in writing with a third person to transfer to him all "of the common stock of said company," and that by successive assignments this contract had passed to several different persons; it further appearing that the same was never so carried into effect as to prevent the company from delivering to the defendant the stock for which he had subscribed, but that, on the contrary, duly-executed certificates of stock, blank as to names and number of shares, had been placed with the company's financial agent, in order that they might be properly filled out and delivered to the defendant and other subscribers upon payment therefor; that in this manner the company had all the while retained actual control of the stock subscribed for by the defendant, for the purpose of having the same delivered to him upon compliance with the terms of his subscription; that this purpose was understood and assented to by all of the several assignees; and that, accordingly, at the commencement of the company's action it was in a position to deliver or cause to be delivered to the defendant the identical original stock for which he had subscribed.
Error from superior court, Chattooga county; John S. Candler Judge.
Action by the Chattanooga, Rome & Columbus Railroad Company, for the use of one Starnes, against M. S. Leigh. There was a judgment for plaintiff, and defendant brings error. Affirmed.
L. A. Dean, J. M. Bellah, and Wesley Shropshire, for plaintiff in error.
W. W. Brookes, W. I. Turnbull, and John D. Taylor, for defendant in error.
In defense to an action brought by the Chattanooga, Rome & Columbus Railroad Company, for the use of one Starnes, against Leigh, upon a contract of subscription for one share of the capital stock of that company, the defendant set up that the plaintiff, after receiving his subscription, had issued, sold, and actually delivered to another, all the stock it was legally authorized to issue, and had thus voluntarily placed itself in a position where it was impossible for it to comply with its part of the contract between itself and him, by the terms of which he was entitled to receive a certificate for the share of stock for which he had subscribed, upon payment for the same.
1. If the defendant had succeeded in establishing by evidence the averments of his answer to the plaintiff's petition there is no doubt at all that the defense would have been good. The law upon this subject is plain and well settled. It is laid down in 3 Am. & Eng. Enc. Law, 903, 904, that: "A party to a contract may break it in one of three ways: (a) By renouncing his liabilities under it; (b) by rendering performance of his promise impossible; (c) by totally or partially failing to perform what he has undertaken." And on page 907 it is said: "If one party by his own act makes the performance of his promise impossible, the other may at once bring an action against him for a breach." The text is abundantly supported by the authorities cited in the notes. It follows necessarily that a party who has made performance upon...
To continue reading
Request your trial