Valade v. Masson

Grant, J. (after stating the facts). 1. Plaintiff subscribed for only one-sixteenth interest. The record is [44] barren of any evidence tending to show any intended fraud by any one in subscribing for the stock. Plaintiff paid Howe & Grindell for his one share. That contract was made in good faith by the plaintiff and all the others. Afterwards, but the precise time is not shown, plaintiff became the owner of another share by gift, but who gave him this share does not clearly appear; neither is it material. It was before the articles of partnership were executed. There is testimony to show that when the notes were executed he stated that he owned two shares. The contract being valid, each subscriber was bound by it, and liable for the amount of his subscription. Any subscriber could thereafter dispose of his stock for whatever consideration he saw fit to receive, or without any consideration. The court might therefore with propriety have instructed the jury that there was no evidence of fraud on the part of the plaintiff in the execution of the contract. The question of fraud, however, was left to the jury, which determined, and we think properly, that the plaintiff was not guilty of any fraud. It follows that this case is not within the principle enunciated in Zabel v. Telephone Co., 127 Mich. 402 (86 N. W. 949); Comstock v. Howd, 15 Mich. 237; and Moore v. Elevator Co., 122 Mich. 48 (80 N. W. 1015). 2. The contract of subscription has never been canceled. There was no agreement, express or implied, at the time of the execution of the notes or of the contract of partnership, that this contract should be abandoned. In order to defeat recovery upon it, it must appear that the notes were received in payment and satisfaction of it. There is no evidence that they were so received. The contract itself provided that the consideration (that is, each one’s share subscribed) was to be secured by a joint'note, with interest. Furthermore, the notes were not executed by all the subscribers. This would be an additional reason on the part of Howe & Grindell not to receive the notes of part of the subscribers in payment of the whole subscription, and there is no evidence that they did so intend. [45] 3. This contract was not a partnership affair. That the subscribers for this stock intended to subsequently form a partnership based upon the ownership of the horse did not make the original contract one of partnership. Howe & Grindell sold to each of the subscribers a one-sixteenth interest in the horse. By this means they became tenants in common of the horse, each subscriber owning an undivided interest to the amount of his subscription. That some of them afterwards formed a partnership to run the horse does not affect the character of, or the liability upon, the original contract. Judgmont affirmed. The other Justices concurred.