Williams v. Taylor

• Decision Date: 15 April 1890
• Citation: 120 N.Y. 244,24 N.E. 288
• Parties: WILLIAMS v. TAYLOR et al.
• Court: New York Court of Appeals Court of Appeals

120 N.Y. 244

24 N.E. 288

WILLIAMS

v.TAYLOR et al.

Court of Appeals of New York,

Second Division.

April 15, 1890.

Appeal from a judgment of the general term of the supreme court, in the first judicial department, affirming a judgment entered upon an order dismissing the complaint on trial at circuit.

This action was brought by the Blair Iron & Steel Company to recover from one Christopher Meyer, since deceased, a balance alleged to be due from him upon a subscription for the purchase of 600 shares of the paid-up stock of said company. While the action was pending a receiver of the corporation was appointed and subsituted in its place as plaintiff, and, Mr. Meyer having died, his administrators were substituted as defendants. Between January 20 and May 15, 1873, the defendant's intestate signed an instrument, of which the following is a copy, viz.: ‘Agreement. New York, January 20, 1873. The capital stock of the Blair Irow and Steel Company is 25,000 shares, of $100 each, $2,500,000. This capital has been paid up by the transfer of the patents for the Blair process and the works at Glenwood, Twenty-Third ward of Pittsburgh, Pa., to the company, (the deed for the Glenwood property to be made as soon as any empowering act can be obtained from the Pennsylvania legislature, which we have bound ourselves to procure,) and the whole stock of said company issued to us in payment therefor. We have agreed to place in the hands of General A. S. Diven, as trustee, 9,000 shares of this stock, to be used as working capital for the company, subject to the order of the board of trustees of said company, excepting $59,000 of the proceeds thereof first to be paid to us by said trustee. The trustees of the company have, with our consent, ordered the sale of 6,000 of said shares for the purpose of raising a present working capital and paying said $50,000, the minimum price to be $50 per share; and said trustee, with the approbation of the board of trustees, now offers said 6,000 shares at said minimum price of $50 per share, to be paid for as follows, viz.: One-third part thereof as soon as the whole 6,000 shares shall be subscribed for, and the remainder in such installments as the board of trustees may call for the same, for the purposes of the business, the certificates to be delivered when the whole shall be paid. THOMAS S. BLAIR. T. STRUTHERS. MORRISON FOSTER, by his Attorney, T. STRUTHERS. We, the undersigned, hereby subscribe to the number of shares of the above six thousand shares set opposite to our names, respectively, to be paid for according to the terms above set forth; but this subscription not to be binding until he whole six thousand shares shall have been reliably subscribed.’

The subscription of Mr. Meyer was for 6,000 shares. By May 15, 1873, the whole number of shares required was subscribed, and subsequently, by order of the board of trustees, the following calls were made upon the subscribers for the payment of their subscriptions: May 15, 1873, a call for 33 1/3 per cent.; October 15, 1873, a call for 10 per cent.; February 18, 1874, a call for 10 per cent.; April 10, 1874, a call for 21 2/3 per cent.; June 1, 1874, a call for 25 per cent. Due notice of these calls was given to all of the subscribers. Mr. Meyer paid $10,000. the amount required upon the completion of the subscription, but made no further payment, and this action was commenced October 14, 1879, to recover the balance alleged to be due from him. Among other defenses, he pleaded in his answer that said cause of action accrued more than six years before suit was commenced thereon, and upon this ground the complaint was dismissed at the circuit.

BRADLEY, J., dissenting.

James Watson, for appellant.

William H. Williams, for respondents.

VANN, J., ( after stating the facts as above.)

The learned general term based its affirmance of the judgment rendered at the circuit upon the following cases: Railroad Co. v. Mason., 16 N. Y. 451;Howland v. Edmonds, 24 N. Y. 307; and Tuckerman v. Brown, 33 N. Y. 297. One of the learned judges, however, in his concurring opinion, said: ‘To hold that the cause of action accrued before the subsequent payments were required to be made is not consistent with the agreement between the defendant and the company when he subscribed for the stock; * * * but the authorities cited in the opinion * * * sustain the power of the court to disregard the terms on which the parties made the money payable, and to hold the contract to be one for the absolute payment of so much money at once. They are controlling, although they do violence to the agreement, and annul the intention expressed in it.’ Williams v. Meyer, 41 Hun, 548. The same authorities were relied upon by the counsel for the respondent in his argument before us, and in addition thereto he cited the case of White v. Haight, 16 N. Y. 310. After a careful examination of these cases, we recognize them as well adcided, but do not think that they are applicable to the case under consideration. In Railroad Co. v. Mason the action was brought to recover the amount of ‘the defendant's subscription to the plaintiff's articles of association for twenty shares of its capital stock.’ The subscription specified ‘no condition nor time of payment,’ but the act under which the plaintiff was incorporated provided that the directors might ‘require the subscribers to the capital stock of the company to pay the amount by them respectively subscribed, in such manner and in such installments as they may deem proper.’ Laws 1850, p. 213, § 7. This section further provided for a forfeiture of all previous payments in case of neglect to pay any installment after personal notice to the subscriber requiring him to pay at a time and place named. The section authorizing subscriptions to be made, however, did not specify when or how they were to be paid. Id. § 1. The court held (page 464) that notice of calls for the payment of subscriptions was necessary only to authorize a forfeiture of the stock, and that section 7 was ‘designed to apply exclusively to proceedings' taken for that purpose; that the obligation to pay, and the time and manner of payment, must be sought for in the contract itself; and that, as the subscription was to pay generally, it was payable presently, the same as a general promise to pay for goods sold or money loaned. In White v. Haight the defendant had given a note...