West Philadelphia Canal Co. v. Innes

The opinion of the court was delivered by Kennedy, J. -Whether an original stockholder in the company, who became such, by having subscribed for the stock, remains *^a^e W pay the residue of the amount thereof, accordingly as it shall be required by the president and managers of the company, he having previously to such requisition transferred his stock, is a question which does not arise here, and therefore need not be determined. As each share of the stock, however, whether fully paid or not, is made transferable by the act under which the company were incorporated, at the pleasure of the stockholder, “subject to all payments due or to become due .thereon;” and the assignee thereof is made expressly liable by the act “ to be sued for all balances and penalties due on such share as the original subscriber would have been,” it is perfectly clear, that there is no ground for holding such assignee liable for payments falling due after he has parted with the stock; for having parted with the stock, he is no longer a stockholder, and both the letter and spirit of the act show that it is because he is the holder of the stock, that he is made liable to be sued for arrearages due on it; and that as soon as he ceases to be the owner or holder of the stock, his liability for all payments falling due subsequently thereto ceases also. He has made no express covenant or engagement whatever to pay; it is only by force of the act that he can benaade to do so, which in clear terms extends no -farther than during the time that he shall continue to hold the stock. And though there may be some plausibility or force in arguing, that the original stockholder, notwithstanding he has assigned his stock, still remains liable “to pay in such manner and proportions, and at such times as shall be determined by the president and managers of said company,” [205] because such are the terms of his written agreement, yet it is perfectly manifest, that no such pretence exists for making the assignee liable. But it is alleged that it was not shown on the trial that the defendant had assigned the stock, so as to cease to be the holder of it: that although he gave evidence of a transfer made, apparently regular enough as to form, yet he failed to show that it had ever been accepted of by George Johnson, to whom it appeared, from the book of the company to have been made: and therefore, without an acceptance by the latter, the company could not hold him liable; consequently, the defendant must still be held bound to pay until he can show that his liability has been shifted and thrown upon the shoulders of some other. The Court below as it is alleged, erred as to this point, in submitting the cause to the jury as if an acceptance of the assignment by Johnson had been clearly proven, and thus rendered perfect. If the state of the evidence were as the counsel for the plaintiff seems to think it was, it would have been error in the Court to have treated the cause, in their direction to the jury, as if fact of the assignment had been clearly established by the evidence. In order to show that a of the stock had been made by the *defendant, it was certainly neto either of it the party named therein, as the assignee, or otherwise show something equivalent to it, which rendered a formal acceptance unnecessary. This latter we think was fully .shown by the evidence of William H. Bernard, who not only testified that he saw the assignment made by the defendant in the proper book of the company, kept for that purpose, in the presence of Robert Beth-ell, the treasurer of the company, as required by the incorporation act of the company, but that he heard Johnson previously consent to the transfer. The truth of this evidence is not controverted ; but it is contended that although true, it does not amount to an acceptance. We, however, do not consider that any subsequent formal acceptance by Johnson, was requisite in such case, in order to make him liable as a stockholder, more than it would have been, to have made him liable to pay for goods, which he had previously agreed to buy from the defendant, and had directed the defendant to deliver at a particular place within a limited time for him, which the defendant had accordingly done; the assignment being made in pursuance of a previous agreement of the parties, and, therefore, as it must be considered in its legal effect, at the request of Johnson, no formal acceptance such as has been contended for by the plaintiff’s counsel, was afterwards neces [206] sary. The defendant having then, according to the evidence, assigned the stock to Johnson at the special instance and request of the latter, made it in a manner sufficient not only to render him liable to pay the defendant whatever he agreed to pay as the price of it, but likewise to pay to the company as the owner thereof, all payments that should become subsequently due upon ic. It has, however, been said the company were without evidence of the agreement between' the defendant and Johnson, in regard to assigning the stock, and therefore, were justified in treating the defendant still as the holder of it, until Johnson called for the certificate that was . made out for him. If that were to be regarded as the only evidence that could be given of acceptance, it would be putting it in the power of the purchaser, at his pleasure, by refusing to take the certificate after it was made out for him, not only to defeat to a certain extent, but also to defraud the seller, who in pursuance of, and upon the faith of the agreement for the sale, had transferred the stock in the usual form. Because, according to the principle contended for here by the plaintiff, the assignor would still be liable to all the charges, but by a voluntary act of his own, having transferred on the books of the company all his right to the stock, would be precluded from receiving any profit which might otherwise have been derived therefrom. But why should it be said that the company were without of the which the between the defendant *and Johnson for the transfer of the stock would be established ? The transfer made on the books of the company, not only with their knowledge, but assent and permission. Before they permitted the assignment thus to be 'entered in their books, they had it in their power to inquire pito the truth of the agreement, between the defendant and Johnson, under which it was proved on the trial the assignment was made; and if the company deemed it proper and necessary to be advised as to this, it is but right to presume, since they permitted the assignment to be made on their book, in the presence of their cashier, who attested it 'as a subscribing witness, that they were satisfied with it, and had no objection to it on account of its not being in conformity to a previous agreement between the defendant and Johnson. The act under which the company have been incorporated, requires that the transfer of stock shall be made in the presence of the president or treasurer, and entered on the book of the company, to be kept by them for that purpose; and the very object requiring all this was, as I take it, that the company might from time to time, and at all times, know who the stockholders were, and deal with them as such. If this view be [207] correct, and I am inclined to think it is, then the book of the company which contained the assignment, and was produced by them, was at least prima facie evidence as against them of a genuine and perfect assignment. — The judgment is affirmed. Judgment affirmed. Cited by Counsel, 5 Wharton, 251; 11 Harris, 46; 4 Casey, 350; 7 Id, 492. Cited by the Court below, 5 Casey, 149. Cited by the Court, 2 Harris, 306. See also 10 Casey, 289 ; 2 Wright,'92.