New York, Housatonic & Northern Railroad v. Hunt

Seymoíír, J. The plaintiff in this case seeks to recover from the defendant the amount of his subscription to the capital stock of the company. The action is assumpsit upon a written instrument averred to have been executed by the defendant, and described in the declaration. The defendant did not file a notice denying the execution of the instrument. The plaintiff therefore was not bound on the trial to prove its execution and delivery, by virtue of § 106 of the Act de Civil Actions. The plaintiff claimed that under this Act he was not bound to produce the instrument, but might regard it as proved as described in his declaration, and proceed at once to show its breach. In this we think the plaintiff is wrong. The statute was intended to dispense with the formal proof of execution, but not to dispense with the production of the writing declared on. The defendant’s subscription should have been produced, or if lost, its contents proved. After the decision of this court in the case of Mahaiwe Bank v. Douglass, 31 Conn., 170, this question is hardly an open one, and requires no discussion. [81] The principal matter in issue between the parties is whether the condition in the eighth article of the plaintiff’s charter has been complied with, which provides that no instalment, except the first, shall be called for until at least $500,000 of the capital stock shall be subscribed. It is agreed that this sum had not been'subscribed in the usual way of direct subscription. About $200,000 was thus subscribed, and one Miller contracted to build the road, and take part pay in stock to the amount of $300,000, and the plaintiff contends that this contract of Miller amounts to a subscription within the intendment of the article of the charter on that subject. The substance of Miller’s contract is that he will build the entire road of forty miles within two years from the date of the contract, and he is to have when tli& contract is completed, among other things, $300,000 in the stock of the company. He failed to fulfil the contract, and became insolvent. We are clear that this agreement by Miller is no subscription to stock within the fair meaning of the proviso. That proviso contemplated subscriptions payable in money, by in-stalments to be regularly called in by the directors. The defendant had a right to expect and require that subscriptions like his own to the amount of $500,000 should be made, before he should be liable for further instalments after the first. The construction put upon this proviso by the plaintiff might lead, we think, to great abuses. It is important to the public, as well as to individual stockholders, that subscriptions should be bond fide, and that the means for building the road should be Secured before the enterprise is entered upon. It seems that the defendant submitted without objection to calls for the first five instalments, and the plaintiff claims that thereby the defendant waived compliance with the strict letter of the proviso, and that it is now too late for him to complain of the non-fulfillment of the condition. Such payments may furnish evidence of waiver, but the finding states the mere fact of the payment, and does not detail the circumstances under which it was made. The finding in this and in some other respects seems imperfect; and in view of the [82] whole record, we think the case should be remanded to tho Superior Court for a new trial, and that the parties have liberty to show the facts connected with the payment of the instalments, with the view of presenting more fully all that bears upon the question of waiver. Some questions were presented relating to variances between the declaration and the proof. It is clear that the plaintiff must amend his declaration, so that the defendant’s subscription shall appear to be, as it was, conditional on the $500,000 being subscribed, and as to the other supposed variances, they can easily be avoided in the amended declaration. The points relating to these variances are not of general importance, and require no decision or discussion here. In this opinion the other judges concurred.