Smith v. New Hartford Waterworks

• Decision Date: 02 April 1901
• Court: Connecticut Supreme Court
• Parties: SMITH v. NEW HARTFORD WATERWORKS.

48 A. 754

73 Conn. 626

SMITH

v. NEW HARTFORD WATERWORKS.

Supreme Court of Errors of Connecticut.

April 2, 1901.

Appeal from superior court, Litchfield county; William T. Elmer, Judge.

Action on a note by Robert R. Smith against the New Hartford Waterworks. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

This action is brought to recover on two promissory notes made by the defendant and payable to the plaintiff,—one for $400, and the other for $350. The answer admits the execution of the notes, and sets up in defense a total want of consideration, alleging in addition to the direct denial of any consideration, and as inconsistent with any valid consideration, certain facts relative to the organization of the defendant corporation, the time the plaintiff was a stockholder, director, and president, and in relation to the good faith of the directors in transactions connected with the first recognition by the corporation of the obligation to the plaintiff which was the nominal consideration of the notes. The allegations of the answer were denied in the reply. Upon the issue of fact thus joined a trial was had, and the judgment file recites that the court finds the issue for the plaintiff. The defendant filed a request for a finding asking the court to specially find the facts on which the judgment was founded, and the subordinate facts from which the main facts and conclusions were found, and also asking a finding of the facts necessary to present questions upon the admission of evidence and other questions of law arising during the trial. In pursuance of this request the court (Elmer, J.) made a finding. The defendant filed a motion to correct the finding, which was allowed only in part, and filed exceptions to the finding as made. This finding, following the draft finding of the defendant, so intermingled the two findings requested as to produce confusion. The facts found by the court are sufficiently stated in the opinion; and, as the decision turns on the legal capacity of these facts to support the conclusion of a valid consideration for the notes in suit, any further statement of details is unnecessary.

Wellington B. Smith and Frank B. Munn, for appellant.

Theodore M. Maltbie and Samuel A. Herman, for appellee.

HAMERSLEY, J. (after stating the facts). The following facts appear from the statements and documents contained in the findings: The defendant corporation was chartered in 1889 for the purpose of constructing and maintaining waterworks in the town of New Hartford, with an authorized capital of $30,000, divided into 1,200 shares. In 1801 the corporation was organized with a subscription for 400 shares, and the plaintiff appointed a director and president, and he and the other directors were all the stockholders. No definite arrangement to construct the waterworks was made until April 17, 1894. Prior to that date the plaintiff had expended his own funds to an amount in excess of $750 in obtaining the defendant's charter, in organizing under the charter, and in defraying the corporate expenses after organization, and had rendered other services not in-eluded in his official duties valuable to the defendant. On April 17, 1894, the defendant made a contract with one John T. Longford for the construction by him of its waterworks, whereby it was agreed, among other tilings, that in part payment for such construction the company should issue to Longford its entire capital stock of 1,200 shares, he immediately to transfer to the several persons named (in payment of their services in part, and to continue them as shareholders) the number of shares which had been subscribed for by them. The persons so named were all the...