Mann v. Currie

Edwards, J. The principal questions which are raised in these cases were decided by the late vice chancellor of the first circuit, then holding the office of assistant vice chancellor. (Mann, receiver, &c. v. Pentz, 2 Sandf. Ch. Rep. 258.) It was contended on the argument by the counsel for the defendants, that inasmuch as I was not bound by the opinion of the assistant vice chancellor, merely on the ground of authority, I ought to re-examine the questions which were decided by him ; and the cases were fully argued before me in all their aspects. Upon reflection I am convinced that there are controlling reasons why I should not, in these suits, review the decision made in the case of Mann v. Pentz. In the first place the parties are different; and secondly, an appeal has been taken from that decision, which is now pending before the supreme court. By the rule- which has been adopted, for the distribution of business in this district, the general term has been designated as the appellate branch of the court.. And I consider it the right of the parties to the appeal, to have their cause heard by the three judges, without being anticipated by any decision of mine. A different course might be productive of confusion, and inconsistency in the decisions of the several branches of the court; which a regard for the sound and safe administration of justice ought to induce me, if possible, to avoid. With these views, which I am the more readily induced to adopt from a consideration of [298] the thorough examination which was given to the subject by the assistant vice chancellor, and the exceeding ability of his opinion, I shall apply the principles which he has settled in the pase before him, as the rule of my decision in the cases before me. Before considering the main questions which distinguish these cases from the case of Mann v. Pentz, I will advert to two questions, which although founded on a state of facts that existed in that case, still do not appear to have been raised or decided: First, that Currie, not being an original subscriber, made no contract with the company; and second, that under the assignment of the stock to him, the most that he agreed to do was, to forfeit the moneys which had previously been paid, in case he should fail to comply with the calls of the company. The answer to the first question is, that if he became a stockholder by a transfer to him of the stock of an original subscriber, he at once adopted his contract with the company, and became substituted in his place, both as regards his rights and liabilities. As to the second question, the general principle is well settled, that the right of the company to enforce a forfeiture is but a cumulative remedy; and, in this respect, there is nothing to distinguish the case of an assignee from that of an original stockholder. The only question, then, which remains for my decision in the case of Currie, which is first in order, is, whether the defendant is the party who should be made liable for the balance unpaid upon the fifty shares of the stock, standing in his name on the books of the company. By the ninth section of the statute, (2 R. S. 469,) under which this suit is brought, it is provided that, “ if there shall be any sum remaining due upon any share of the stock, the receiver shall immediately proceed, and recover the same, and for that purpose may file his bill in chancery,” &c. But the statute does not say from whom “ he shall recover the same.” And I am called upon to decide what, in this respect, is ito meaning, and legal effect, as applicable to the circumstances of this case. If this question had not already been settled by [299] authority, at least so far as the principle which must govern it is involved, still I should have no hesitation in saying that the defendant, Currie, is the person against whom the receiver was bound to proceed, and from whom he is entitled to recover. Any other rule than this would lead to uncertainty, confusion, and injustice. As appears by his certificate of stock, he was the party with whom the company contracted. If he wished to transfer his stock and substitute another person in his place, he could have done so. But by the terms and conditions of his certificate of stock, which constituted his contract with the company, he could only have done so by making a transfer upon the books of the company, and by delivering up to them his certificate, either in person or by his attorney. Until such a transfer was made, he was entitled to vote at elections, to receive dividends, and to enjoy the other rights of ownership; and, at the same time he was subject to the liabilities of a stockholder. If he acted as trustee for Prevost, as it is alleged that he did in the first instance, such fact, not appearing in. his contract with the company, or on their books, was a matter between himself and his cestui que trust. Or if he after Wards assigned the stock held by him, to Prevost, but without Snaking a transfer upon the books of the company, he still con tinned liable for all sums remaining due upon the shares of stock standing' in his name. If there are equities between Currie and Prevost, this is not the proper suit in which to settle them. I consider the principles, which I have laid down, as abundantly sustained by authority. (Bank of Utica v. Smalley, 2 Cowen, 770. Com. Bank of Buffalo v. Kortright, 22 Wend. 348. Adderly v. Storm, 6 Hill, 628. Union Bank of Georgetown v. Laird, 2 Wheat. Rep. 391. The Marlb. Manuf. Co. v. Smith, 2 Conn. Rep. 579.) As regards the case of Yan Deuzer, there is nothing to distinguish it from the case of Currie. It appears that Yan Deuzer had executed a power of attorney to Carhart, to transfer the stock which stood in his name, but that no transfer was made upon the books of the Company. As to the case of Leland¡ I See nothing to induce me to dif [300] fer from the opinion expressed by the assistant vice chancellor in the case of Mann v. Pratt, (2 Sandf. Ch. Rep. 273,) that an agreement to consolidate the stock could not affect the rights of creditors of the company, or of the other stockholders who were not parties to the arrangement. The plaintiff is entitled to a decree for the amount unpaid on the shares of stock, standing on the books of the company, in the names of the defendants, in each of the cases.