I should be yery well satisfied if I were able to uphold the judgment rendered by my brother Allen in this case. The unfortunate rail road enterprise which the plaintiff, as receiver, represents, has already swallowed up, past recovery or redemption, several hundred thousand dollars of the hard earnings of the subscribers to the stock, without the least hope of any adequate return or indemnity. I do not wonder at the reluctance with which these calls are met, and am disposed to listen favorably to any fair and legitimate de
The facts in this case, upon which the question of law arises, are undisputed, and are in substance these: that the Ogdensburgh, Clayton and Borne Bail Boad Company was incorporated in April, 1853, and the defendant immediately thereupon became engaged as an agent for the company in procuring subscriptions, and negotiating for the right of way, and between that month and the 25th of February, 1854, procured subscriptions to the amount of $7700, and in several instances received the 10 per cent on the subscriptions thus obtained. While thus engaged, and in July; 1853, he made a subscription on his own behalf of $500, to the stock of the company; paying, however, nothing in form to himself or any one else upon such subscription. Subsequently to this, calls for installments upon the stock of the company were made by the directors; the first falling due on the 1st of February, 1854. On the 25th of February, after this call was due, the defendant presented an account to the company, making a charge of $450 for his services theretofore rendered and expenses incurred in the course of his agency, and crediting the sums paid to 'him by the subscribers to the stock as such agent, and also the original 10 per cent on his own subscription, and the first call of 10 per cent, being all that was then payable, and struck a balance against the company of $200, in cash, which was allowed, and on the 27th of February paid to him by the treasurer of the company.
The 4th section of the general act rail road requires that every subscriber, at the time of subscribing, shall pay to the directors 10 per cent on the amount subscribed by him, in money, and forbids any subscription to be received or taken without such payment. (Laws of 1850, ch. 140, § 4.) The defendant insists that as 10 per cent was not paid by him at the time
In the case of Beach v. Hazard, tried before me in September, 1857, it appeared that the defendant paid nothing at the time of subscribing, but that subsequently, after three calls had been made upon his stock, he gave his note for the ten per cent and the amount of the calls, and paid the note after maturity. The suit was brought to recover three other calls afterwards made, and I held and decided that the defendant was not discharged from liability on his subscription by his . failure to pay ten per cent at the time of subscribing, but that the payment of the same, with the subsequent calls, operated as a waiver of the condition and a recognition of his continuing liability on his subscription. Judgment was accordingly rendered for the plaintiff for the subsequent calls, and the defendant acquiesced in the decision and paid the amount demanded in the suit. In the case of The Utica and Black River R. R. v. Clarke, which was before us on appeal at the last July term, it appeared that the defendant, on the trial, offered to show that he paid nothing at the time of subscribing, but gave merely a memorandum check drawn on a bank where it was, at the time, understood that there were no funds to meet it, but conceding that he had subsequently paid $400 in cash, . which included the ten per cent and three calls on the stock. The referee rejected the offered evidence, on the ground that the subsequent payment on the subscription was an affirmance thereof,'and rendered it valid and binding as if an original payment had been made. To this ruling there was an exception, and on appeal we affirmed the judgment; thus holding with the referee on this as well as on other questions. involved in the case.
The points decided, and the principles recognized, in these
But beyond this, when the defendant, in February, 1854, presented his account to the company, charging himself and crediting the company with not only the ten per cent but the first instalment called upon his stock, he, in the most express and emphatic manner ratified his subscription and recognized his continuing and existing liability thereon. It is a perversion of the language and intent of the section, it seems to me,
Assuming that by the omission to comply with the strict letter of the statute in not placing the money in his own hands at the instant he dropped the pen with which he made the subscription, the defendant could have repudiated the contract, and declined thereafter to fulfill any of its obligations; yet he chose to pay, subsequently, and not to disaffirm the contract; and it would be strange indeed if after this the law will interpose, and either ignoring or putting aside the voluntary act of the party recognizing his liability, declare that he shall not be bound because he omitted a ceremony in the beginning which he took the earliest opportunity which subsequently occurred to atone for and supply. When the defendant presented his account, in February, charging the company for his services and crediting the ten per cent and the first installment on his subscription, and received from them in cash the balance-of his demand, the legal effect of the transaction was precisely the same as if he had given the company his check for two hundred dollars, being the amount due them, and received from the company theirs for $400, the entire amount of his account. No one would have doubted that this would have been a payment in money on his subscription, which, in accordance with the principles settled by, and acted on in this court, would have operated to ratify and confirm
Bacon, W. F. Allen and Mullin, Justices.]
It cannot be questioned, I think, that the effect of tMs settlement was an affirmance on the part'of the defendant of Ms liability upon his subscription, and on the part of the company a recognition of Ms standing in that precise position wMch entitled him to be thus regarded. He could claim all his rights as a stockholder and the company would have been bound to concede them. - An attempt on their part to evade any claim which he might lawfully make as a stockholder could have been successfully resisted by the defendant. It would not have been listened to for a moment in any legal tribunal, and I think the right and the duty are reciprocal, and both equally attach to and are binding on the defendant.
I am of opinion that the judgment should be reversed, and a new trial granted, with costs to abide the event.
Mtjllin, J., concurred.
W. F. Allen, J., dissented.
Judgment reversed.