Cox v. Bodfish

Shepley, C. J. — The association of which the defendant was president, was formed by an instrument subscribed and sealed by the parties to it. Each person was to have one share for every $500 subscribed. The capital was to consist of eighty shares, transferable certificates of which were to be issued. The constitution of the association provided for a choice of officers, and that the president and directors should “have the exclusive direction and arrangement of all the concerns of the company and treasury department.” Thus constituted it became rather a joint stock company than a proper co-partnership. If they had been co-partners, each individual could have disposed of the whole property, incurred liabilities, and made purchases. [307] In this association no one, nor even all the members, not being directors, could have done this. And the law applicable to partnerships proper does not decide the rights of the members. Livingston v. Lynch, 4 Johns. Ch. 573; Irvine v. Forbes, 11 Barb. 588. By the constitution of the company, no person could become a member of it without subscribing and sealing the indenture or obtaining a certificate of stock directly, from its officers or by transfer. Two classes of stockholders were provided for, those who owned stock without engaging to render any personal service, and those who agreed to go to California and to devote their personal services exclusively for the benefit of the company, for which each was to have one additional share. There was no provision, that a person who was not an owner of stock should become so by rendering such personal service. The plaintiff does not appear to have become one of those members, who had agreed to render a personal service. The testimony shows, that he consented that Frederick Wells should represent his share ; and that he was permitted to perform service for a time, and to vote and act as a member of the company. Such permission and action could not constitute him a legal member, for those members who performed service had no power to introduce thus a new member. If they permitted him thus to act as a member, and to have the privileges of one, and to derive a benefit from them, it must be imputed to their own inconsideration or negligence. One who was not legally a member of the company, could not by a violation of its laws occasion the forfeiture of a share of one, who was a legal member. The defendant does not appear to have been aggrieved by the instructions which were given, and those requested were properly refused. Exceptions overruled,, Howard, Wells and Hathaway, J. J., concurred.