Rockland, Mt. D. & S. S. B. Co. v. Sewall

• Decision Date: 15 March 1886
• Citation: 3 A. 181,78 Me. 167
• Parties: ROCKLAND, MT. D. & S. S. B. CO. v. SEWALL, Adm'r.
• Court: Maine Supreme Court

3 A. 181

78 Me. 167

ROCKLAND, MT. D. & S. S. B. CO.

v. SEWALL, Adm'r.¹

SUPREME COURT OF MAINE.

Filed March 15, 1886.

On Exceptions. Assumpsit, to recover the par value of 10 shares of capital stock subscribed for by defendant's intestate in plaintiff corporation. The case was withdrawn from the jury, and submitted to the presiding justice for decision, with the right to except thereto, and have the whole case reported to the law court. The decision of the presiding judge was in favor of the plaintiff, and thereupon the defendant alleged exceptions.

A. P. Gould, for plaintiff.

C. W. Larrabee, for defendant.

VIRGIN, J. Assumpsit, to recover the par value of 10 shares (at $100 each) of capital stock which the plaintiff alleges the defendant's intestate agreed to take and pay for by executing certain articles of agreement of November 7, 1878, mutually entered into by him and sundry other persons. When the plaintiff's evidence was closed, "the case was withdrawn from the jury, and submitted to the presiding justice for decision, with the right to except thereto, and to have the whole case reported to the law court." The plea of general issue admits the plaintiff's corporate existence and power to sue. Ticonic Bank v. Bagley, 68 Me. 251. By the second and third articles of the association executed prior but with reference to its organization, the parties thereto agreed that the capital stock of the company, on its organization into a corporation, shall be $40,000, divided into shares of $100 each; and the "parties to the agreement shall contribute towards the capital such sum of money as they may severally place against their names," etc. The agreement was signed by sundry persons, and by the defendant's intestate as follows: "EDWARD SEWALL">, ten shares."

Assuming a fair construction of the agreement to be that the defendant's intestate thereby agreed to take and pay for, or take and fill 10 shares at $100 each; that the association was duly organized under the general law, as contemplated by the stipulations in the articles of agreement; and that the shares thus subscribed were recognized as shares of its stock, and the subscribers as corporators or shareholders,—still we are of opinion that the defendant's intestate, who never took any part in the organization, cannot be held upon his subscription, since it does not appear that the whole capital was subscribed. The agreement is to take a certain number of shares of the capital stock, and that must have reference to the capital stock fixed in the agreement, and subsequently placed at the same sum in the vote of the corporation. "There must therefore have been such a capital stock obtained before the subscriptions could be binding." Gldtowa & L. R. Co. v. Veazie, 39 Me. 571, 577, 578. It cannot be presumed that persons agreeing to become shareholders in a corporation with a fixed capital intend to become members of a corporation with a less capital. Moraw. Corp. 259. "It is a rule of law, too well settled to be...