North v. Forest

Waite, J. The object of the parties, in presenting the case in its present form, was, to obtain a decision upon two questions involved in the case: 1. Whether the contract for the sale of shares in a joint stock corporation, is within the statute of frauds. 2. If it be, whether the discharge from such contract, is a [404] sufficient consideration for the promises set forth in the de- - claration. 1. The provisions of our statute relating to the sale of goods of the value of thirty-five dollars and upwards, are the same as those in the English statute, upon the same subject. Although it was formerly doubted, by the English judges, whether a contract for the sale of shares in an incorporated company, fell within the provisions of their statute, yet now it seems, that the better opinion is, that it does. 3 Stark. Ev. 352. (6th ed.) The question, however, has recently been brought before the supreme court of Massachusetts, and after a deliberate examination of the authorities, that court has decided, that such a contract falls within the statute. Tisdale v. Harris, 20 Pick. 9. That decision, in our opinion, is not only supported, by the greater weight of authorities, but is founded upon good sense. The corporation, respecting the stock of which the contract in that case was made, was situated in this state; and by the provisions of our statutes, the shares of such stock, are made personal property, and are to be disposed of as such. Slat. 89. tit. 6, c. 2. s. 3. (ed. 1838.) In consequence of the great increase of incorporations, and the amount of capital invested in them, the stock of such companies has become a large and valuable portion of the personal estate of our citizens. Contracts for the sale of such property are almost daily made; and often to a very large amount. Such contracts fall clearly within the mischiefs, which the legislature, by the statute, intended to remedy. There is as much danger of fraud and perjury, in the parol proof of such contracts, as in any other. The statute is highly important and beneficial in its operations, and ought not to be narrowed, by any very rigid construction. Howe v. Palmer, 3 B. & Adol. 321. (5 E. C. L. 304.) And we think it no strained construction of its language to say, the contract in question falls within the letter, as well as within the spirit of the act. 2. If the contract is invalid, by the provisions of the statute, is the discharge from such contract a sufficient consideration for a parol promise ? The language is, “ that no contracts for the sale of any goods, wares, and merchandise, for [405] the price of thirty-five dollars or upwards, shall he allowed to he good, except the buyer accept part of the goods,” &c. Stat. 299, 300. tit. 39. s. 2. The contract, for the sale of the stock, by the terms of the statute, was of no validity between the parties. No action whatever could have been maintained against the defendant for any breach of that contract. Of what use, therefore, was a discharge ? The law is well established, that to make a parol promise obligatory upon a party, it must be made upon a sufficient consideration. Such consideration may be either a benefit to the party promising, or a loss to the party to whom the promise is made. Cook v. Bradley, 7. Conn. Rep. 62. In this case, what has the plaintiff lost, or the defendant gained, by the discharge ? The contract for the sale of the stock, was just as invalid and nugatory, before the discharge was given as afterwards. The plaintiff could not have enforced a fulfilment, nor the defendant have suffered for a violation. But it is said, the defendant was under a moral obligation to fulfil the contract ; and that a discharge from such obligation is a sufficient consideration. It is true, there are certain cases, where a moral obligation has been holden a sufficient consideration to support an express promise ; as where there has been an antecedent liability, which has been removed, by some subsequent events or proceedings — such as a debt barred by the statute of limitations, or discharged by a certificate of bankruptcy — -a subsequent promise by the debtor to pay, may be enforced. So where one person has received the property of another, at his request, and appropriated it to his own use, but under such circumstances, that the law, for reasons of policy, will not subject him to pay for it, he may, nevertheless, make himself liable, by a subsequent express promise, made when those circumstances cease to exist; as where goods have been sold to an infant, although his promise to pay for them, made during infancy, will not be enforced, yet it will be binding, if made after he becomes of age. But it is now well settled, that a moral obligation is not, in every case, sufficient to uphold a parol promise. Thus, the obligation which a man is under to provide for a destitute father, is not sufficient to support a promise to pay for [406] necessaries previously furnished to such parent. Cook v. Bradley, 7 Conn. Rep. 57. Nor will the promise of a woman, made after the death of her husband, to pay for necessaries furnished to her, while a feme covert, although, at the time, living apart from her husband, be legally binding upon her. Littlefield v. Shee, 2 Barn. & Ald. 811. (22 E. C. L. 187.) The moral obligation to pay, in such case, is not a sufficient consideration for her promise. Now, in the case under consideration, there never was any legal liability resting upon the defendant to fulfil his contract for the purchase of the stock. Nor has he ever received any of the property of the plaintiff. The case, therefore, does not fall within principles recognised in the cases cited, where the moral obligation has been holden sufficient. But it is further claimed, that here has been a part performance of the contract, by the sale of the stock. But we see no foundation for this claim. The defendant has indeed sold the stock ; but this he could have done as well without any contract with the plaintiff, as with it. The contract made with the plaintiff was invalid, and did not prevent the defendant from treating the stock as his own, and selling it as such. Our advice, therefore, is, that upon the facts stated in the declaration, and in the second plea of the defendant, the plaintiff is not entitled to recover. In this opinion the other Judges concurred. Judgment for defendant.