Lamkin v. Palmer

Hardin, P. J.: Upon the trial it was proven that on March 1,1892, a corporation known as the M. S. Robinson Musee Company was formed, and that it thereafter carried on business at Buffalo and Rochester, and that the plaintiff became a manager thereof. In April, 1892, ten shares of the capital stock of the company were transferred to the plaintiff, who became the owner thereof. Evidence was given tending to show that prior to July 11, 1893, the plaintiff loaned to M. S. Robinson, who was the president of the corporation, $2,150, which went into the corporation and was used for its benefit; and in July, 1893, there was issued by the company to the plaintiff fourteen shares of the preferred and fifteen shares of the common stock of the corporation for the money which was so loaned by the plaintiff and used by the corporation, and evidence was given tending to show that the money had never been repaid. In July, 1893, the company was indebted to divers persons to the extent of $37,000. On the 2d day of August, 1893, the defendant entered into a [258] written agreement with certain of the stockholders of the corporation, wherein it was recited that the debts and liabilities incurred by the company in the management of the Rochester theatre amounted to about the sum of $14,000, and in that agreement he assumed and agreed to pay, “ as between the parties hereto, the indebtedness of the M. S. Robinson Musee Company at Rochester ; ” and D. E. Morgan, Son & Allen and others of the parties to that agreement agreed with him to “ sell, assign, transfer and set over to the party of the third part (the defendant) three hundred and twelve shares of the capital stock of said company, of which one-half thereof shall be preferred and one-lialf thereof common stock.” That agreement also provided that the directors in the company should be increased to five, and that the defendant should become one of the directors. When that agreement was offered in evidence the defendant objected to the same, and his objections thereto were overruled. We think that the agreement was competent as tending to show the relation of the defendant to the corporation and the extent of his interest and ownership therein, and that no error was committed in receiving the same in evidence. Apparently, after that agreement was made, the corporation continued to lose money, and in the early part of December, 1893, the Buffalo property owned by the corporation was destroyed by fire, except about $240 thereof. Thereupon the parties in interest became solicitous to sell out the remaining assets of the corporation. The negotiations for the sale did not become effective until in January, 1894. In that month the defendant entered into negotiations with one Moore, for the purchase of the property remaining at Rochester, and with a view of making the purchase he had an interview with Moore and also with Wiggins, Moore’s agent. Moore evinced a willingness to buy the property provided he could have a transfer direct from the defendant, declining to take a transfer from the corporation. Thereupon the defendant communicated with the parties in interest in Buffalo, and several negotiations were had with a view of having theo stockholders consent to a sale of the property by the corporation to the defendant, to the end that he might consummate a sale thereof to Moore. At that time the defendant was liable as an indorser or otherwise to the extent of some $7,500, and he was also liable, by reason of his agreement made on the second of August, to save the other parties [259] harmless from the payment of the indebtedness accrued at Rochester ; and apparently he became solicitous to get the Rochester property turned into money with a view of enabling him to liquidate the indebtedness for which he had become liable. He procured an offer from Mr. Moore to purchase the property for $12,500, and executed an agreement with Moore that when he had procured the title of the property he would transfer it to Moore for that price; and to effectuate the purposes of the defendant in acquiring the title, to the end that he might transfer the same to Moore, efforts were made to secure the consent of the stockholders and to induce them to sign a wwitten consent to the sale so as to avoid all question that might be raised in respect thereto. A written consent was prepared which contained the following language: “We, the undersigned, do hereby consent that the M. S. Robinson Musee Company may sell its Rochester theatre and execute a bill of sale thereof dated January 8th, 1894, and shall include the book accounts due the Rochester house, and the scenery effects and properties of the theatre and the lease. Dated January 8th, 1894.” That instrument was signed by M. S. Robinson, by the defendant and several other stockholders, and, according to the testimony given in behalf of the plaintiff, it was presented by the defendant to the plaintiff to sign. According to the testimony the plaintiff, apparently, was unwilling to sign the same until he could receive some promise which should benefit him if he gave the consent. The plaintiff testified that he had an interview with the defendant in respect to signing the consent in January, 1894. He says: “ That talk upon the subject of my signing a consent to the sale was in the office of the Musee at Rochester. There was not any one present. He wanted me to sign the stock. I refused to sign it, and saying that that was all that was left of the Musee, and that I had this money in there that I had put in from time to time and had worked hard for, and I couldn’t afford to lose it, and he went away. I positively refused to sign it. He came back in a day or two and wanted me to sign it again, and I refused to sign it; he asked me if I wanted the sheriff to come in and take the place. I told him I could stand it if lie could, as I knew he was on a large amount of paper. That was the only way I had of getting my money, was not signing that paper until he agreed to pay me. Before he went away that time he said, [260] 'If you will sign this paper I will agree to pay you as soon as the house is sold ou t of the money that I get for the house.’ ” The witness then added : “ They (the other stockholders) had all signed ; ” that he saw their names. And he further testified that the defendant produced a paper there, and they had all signed except the plaintiff. He added that after the statement made to him he signed the paper. The witness was then interrogated by the court as follows: “ Q. What did he tell you he would do if you would sign ? A. He would pay my claim, which was $2,150.00, oat of the money he received for the theatre.” The testimony given by Mr. Marcy, Mr. Close and Mr. Willis Morgan, as well as the facts and circumstances and negotiations revealed by the telegrams and letters passing between the several parties, tends strongly to corroborate the testimony, upon the vital question, given by the plaintiff. Upon the other hand, the testimony given by the defendant, as a witness, is in conflict with the testimony given by the plaintiff and his witnesses; and we think that a question of fact was presented for the jury to determine, and that the weight of the evidence being in favor of the plaintiff, we should accept the verdict of the jury as final upon the disputed questions of fact. The defendant consummated the sale of the property to Moore and received $10,000, besides a note of $2,000 made by M. S. Robinson, which was indorsed by Moore to the defendant, without recourse. There is sufficient evidence to show that, before this action was commenced, the plaintiff made a demand of the defendant that he pay the $2,150, and the defendant refused to pay the same. This action was not commenced until July 20, 1895, which was long after the defendant had realized the full fruits of the sale made by him of the property to Moore. It is contended in behalf of the appellant that the plaintiff did not prove any cause of action. The plaintiff had an interest in the assets of the corporation. When he signed the consent he waived that interest. “ A share of stock may be defined as a right which its owner has in the management, profits and ultimate assets of the corporation.” (Cook Stock & Stoclch. [2d ed.] § 5.) We think the consent furnished a sufficient consideration for the agreement made by the defendant, and that the promise of the defendant was an original undertaking founded upon a new and dis [261] tinct consideration moving to the defendant and beneficial to him. (Jones v. Bacon, 72 Hun, 506; S. C. affd., 145 N. Y. 446; White v. Rintoul, 108 id. 223; F. N. Bank v. Chalmers, 144 id. 432.) We think the exception to the charge that “ there was sufficient consideration in law to uphold the claim, if they believe the testimony of the plaintiff,” presents no error. In connection with that exception there was a request “ upon that subject ” that “ it was not necessary that every stockholder should'give his consent, either in writing- or orally, in order to enable the trustees to make a valid sale of the property, which it conveyed under the bill of sale in question, and, of course, that is the main question over again.” We think the request was so involved, connected with the subject of the consideration, and an avowal that it is the main question over again, to wit, the question of consideration, that the refusal to charge in accordance therewith presents no error. The parties acted upon the assumption that the consent of all the stockholders was essential to complete the negotiations that were set on foot between the defendant and Moore. Indeed, the defendant acted upon the assumption that the consent of all the stockholders was necessary, and especially the consent of the plaintiff, and if he made the agreement that, if the plaintiff would consent, he would pay him $2,150, as the jury have found, he became liable to pay him that sum. We have looked at some other exceptions taken during the progress of the trial, and find none of them which require us to disturb the verdict on the principal question of fact. We think the verdict should remain. All concurred. Judgment and order affirmed, with costs.