Schwartz v. Manufacturers' Casualty Ins. Co.

• Decision Date: 16 May 1939
• Docket Number: 181
• Citation: 335 Pa. 130,6 A.2d 299
• Parties: Schwartz, Appellant, v. Manufacturers' Casualty Insurance Company
• Court: Pennsylvania Supreme Court

6 A.2d 299

335 Pa. 130

Schwartz, Appellant, v. Manufacturers' Casualty Insurance Company

No. 181

Supreme Court of Pennsylvania

May 16, 1939

Argued April 21, 1939.

Appeal, No. 181, Jan. T., 1939, from judgment of C.P. No. 3 Phila. Co., June T., 1938, No. 4466, in case of Hymen Schwartz v. Manufacturers' Casualty Insurance Company. Judgment affirmed.

Assumpsit.

The opinion of the Supreme Court states the facts.

Affidavit of defense raising questions of law sustained and judgment entered for defendant, opinion per curiam. Plaintiff appealed.

Error assigned, among others, was judgment for defendant.

Judgment affirmed; costs to be paid by appellant.

Michael Edelman, for appellant.

John B Martin, with him Duane, Morris & Heckscher, for appellee.

Before KEPHART, C.J., SCHAFFER, MAXEY, DREW, LINN and STERN, JJ.

OPINION

MR. DREW, JUSTICE.

Plaintiff brought this action of assumpsit on August 11, 1938, alleging that he is a stockholder in defendant company and claiming that he is entitled to recover $8,322.65 in dividends, plus interest, on shares of which he is owner. To the bill of complaint defendant filed a statutory demurrer, averring that the statement of claim was insufficient in that plaintiff had failed to show that he was the owner of any shares of stock in defendant company, and, in addition, that plaintiff's action is barred by the statute of limitations and by laches. The court below sustained the demurrer, and, from the judgment thereupon entered for defendant, plaintiff has appealed.

The bill of complaint discloses the following facts: On August 9, 1916, the Lehigh Valley Silk Mills subscribed for 100 shares of stock of the defendant company at $20 per share, the purchase price to be paid in nine monthly installments. Subsequently the Lehigh Valley made another subscription for 150 more shares upon the same terms. After having paid seven installments on the first subscription and only two on the second, the Lehigh Valley made no further payments. From March 2, 1917, when the last payment was made until the time the present suit was brought, nothing was done by the Lehigh Valley with reference to the stock. During the 21 years following these subscriptions, numerous stock and cash dividends were declared by the defendant company on its capital stock, but none of these were ever paid to the Lehigh Valley and during all these years it made no claim to any dividends. In May, 1937, the Lehigh Valley was adjudged a bankrupt and on December 29, 1937, the Trustee in Bankruptcy assigned the two certificates of subscription to plaintiff.

The questions of laches and the statute of limitations are immaterial to the decision of this case, for it is clear that the demurrer was properly sustained, since plaintiff has failed to show that he is a shareholder in defendant company. In construing plaintiff's statement of claim "the intendments are taken most strongly against the pleader, for he is presumed to have stated all the facts involved, and to have done so as favorably to himself as his conscience will permit": Maguire v. Preferred Realty Co., 257 Pa. 48, 52; Humes v. Kramer, 286 Pa. 251. Hence, we must presume that the agreements relied on by plaintiff were not for an original subscription in a corporation to be formed, but were rather subscriptions for shares in an existing corporation. The subscriptions were thus simply contracts of purchase and sale and the failure of the subscriber to fully execute its part of the contracts prevented it from acquiring the status of a shareholder Bole v. Fulton, 233 Pa. 609; Bender v....