Lorillard v. Clyde

• Decision Date: 08 May 1885
• Citation: 1 N.E. 614,99 N.Y. 196
• Parties: LORILLARD v. CLYDE and another.
• Court: New York Court of Appeals Court of Appeals

99 N.Y. 196

1 N.E. 614

LORILLARD

v.CLYDE and another.

Court of Appeals of New York.

Filed May 8, 1885.

Samuel Hand, for appellants, William P. Clyde and another.

Horace Barnard, for respondent, Jacob Lorillard.

MILLER, J.

This action was brought to recover a balance due the plaintiff on the first day of July, 1876, pursuant to an agreement made by defendants, guarantying to the plaintiff dividends not less than 7 per cent. per annum on 1,500 shares of stock of a steam-ship company to be organized, of the par value of $150,000. For some time prior to the making of said agreement, plaintiff and defendants were respectively engaged in the business of transporting freight between New York and Philadelphia, in competition with each other. This agreement was made and entered into for the purpose of consolidating the business of said parties, uniting their capital under one management, and thereby conducting the business in a more economical and profitable manner, and it simply provided for the union of the business and property of the respective parties in a corporation to be formed under the laws of the state of New York; fixed the cash valuation upon their respective properties; provided that the defendants should have the general management at the usual commissions; that they should guaranty to the plaintiff a dividend upon his stock of not less than 7 per cent. per annum; that neither party should be interested directly or indirectly in opposition to the lines owned by the defendants individually.

There is no evidence showing that the agreement, or any portion of it, or that any subsequent act of the plaintiff, was designed to, or in fact did, in any way improperly influence the management of said company. On the contrary, the agreement provided that the management of the line should be in good faith, and as economical as possible, etc.

The evidence shows, and it is not disputed, that the certificate required by statute, signed and properly executed by the requisite number of persons, was duly filed; that the whole amount of the capital named was duly paid in by the transfer of steamers to the company, and no question has ever been raised as to the propriety of the valuation put upon the steamers; that the defendants assumed the management of said company, carried on the business, and received the usual commissions from 1874 to 1880; that the plaintiff fully performed said agreement on his part, received, and now holds 1,500 shares of the stock of said company, of the par value of $150,000; that no dividends have been declared by said company, and the balance of the 7 per cent. guarantied by defendants has not been paid, although payment has been demanded. This action for the balance due upon said guaranty, from July 1, 1874, to July 1, 1876, having been brought to trial before the court and a jury, a verdict was directed for the plaintiff.

The appellants insist that the plaintiff and defendants here having been plaintiff and defendants in the action brought to dissolve the corporation, every question determined in that case is res adjudicata as between them, and the findings of the jury and judgment therein are conclusive evidence against both as to all matters therein litigated. That action was brought by the people against the Philadelphia & New York Steam Navigation Company to dissolve the same on the ground of the improper, wasteful, and injurious management of the affairs of said company by W.P. Clyde & Co., the defendants in this action. The plaintiff here was not originally a party to that action, but an attempt was made to bring him in as a party after the issues had been settled. It appears from the judgment roll introduced in evidence upon the trial that at a special term of the supreme court, upon the...