Perkins v. Union Button-Hole & Embroidery Machine Co.

Chapman, J.

The agreement referred to in the declaration was designed to be the basis of a corporation, to be formed under Gen. Sts. c. 61. On the 21st of April, the day of the date of this agreement, there was no corporation of which the plaintiff could be a member, or with which he could contract. Until its organization, the articles of agreement could have no further effect than to bind the subscribers mutually to each other as individuals. When it was organized on the 3d of July, he had a right to take part in the organization, and thus act as a member in the organization, or to take the stock which he had sub scribed for, according to the terms of the by-laws which were then adopted, and thus become a member.

*279The third section of the statute prescribes the mode of calling the first meeting of corporations to be formed under it. The notice must be signed by one or more of the persons named in the articles of agreement, and a copy must be given to each member or published in some newspaper printed in the county at least seven days before the time of meeting. It appears that a notice was prepared, in conformity with this provision, dated June 24th, and signed by one of the associates. It was not served upon the plaintiff personally, but it was duly published in a newspaper, and thus the statute was complied with. But this is not all. From and after April the plaintiff bad an office at No. 124 State Street in Boston. About the last of June or the first of July he went to Montreal, and remained there and in New York until the last of October. He gave no notice of his going, or where he might be found. He left his office open in the care of his son to transact his business so far as he could do it, and his son signed a paper, which was also signed by the other associates, acknowledging on behalf of the plaintiff the receipt of a written notice of the meeting, seven days before the time appointed for holding it. This appears to be within the scope of his authority, and should, in the absence of contradictory evidence, be deemed equivalent to personal notice.

By the terms of the agreement the whole number of shares was to be twelve thousand; and all subscriptions under one hundred’ shares were to be paid for on the organization of the company. The other subscriptions were payable one third in cash on the organization of the company, one third in six months with interest, and one third in twelve months with in terest; or all in cash, at the option of the subscriber. The recita, that a large sum was to be paid to Vogel and Humphrey fox the transfer of the letters patent under which the business of the company was to be carried on made the importance of the prompt payment of the subscriptions very apparent to subscribers.

The plaintiff’s subscription being for two hundred shares, he was bound by the agreement to pay one third of it upon the organization of the company. The defendants preparad a *280stock-book in which they entered his name as a stockholder for two hundred shares. The directors fixed the 16th of July as the time for paying the first instalment, and prepared notices of the fact to be sent to the subscribers. The plaintiff’s office had been given up, and he had left no information where he might be addressed. The notice to him. was put under the door of his office, and afterwards mailed to him at South Reading, and another notice was sent to him at Montreal. He had no house at South Reading, but had one at Reading. On the 21st of September, the officers of the corporation having heard nothing from him, erased his name from the articles of agreement, made an entry on the stock-book that his stock was forfeited, and permitted another person to take it. The plaintiff contends that they had no right to do this, but were bound to sell his stock in conformity with the provisions of the statute for non-payment of assessments, if they desired to dispose of it. The English au • thorities that have been cited furnish us with very little aid in deciding this question, for they all arose under the peculiar provisions of the English railway acts. Nor are any of our own cases that have arisen under special acts of incorporation decisive of the question. In all of them, however, the general principles of law applicable to contracts have been recognized and adopted, and these principles ought to govern the present case.

The plaintiff brings his action on the ground that, though his agreement was originally made with his associates as" individuals, yet the corporation, upon its organization, became a party to it, and liable to the plaintiff for its performance. Assuming this to be so, yet in order to enable him to enforce its performance against them, he must allege and prove performance or readiness to perform on bis part. The obligation on the part of the corporation was to allow him to take the two hundred shares for which he had subscribed. On his part it was to take and pay for them. By the terms of his subscription one third of the amount was payable immediately upon the organization, which took place on the 3d of July. The vote of the directors post- ' poning the payment to the 16th of July was a mere extension of time upon his promise. A notice of the postponement would *281hardly be necessary, yet the officers made all reasonable efforts to give him notice of it, and failed because he had gone out of the Commonwealth and left them ignorant of his address. He remained absent, and neglected to do anything towards the performance of the contract, and on the 21st of September the defendants elected to treat him as having abandoned the contract on his part, and undertook to rescind it on their part by erasing his name from the agreement and from their books, and allowing another party to take the stock which he had been entitled to take. We think that under the circumstances of the case his delay to perform the contract was unreasonable, and that they were thereby released from all further obligation to him. As he had never assented to the organization of the corporation, or to any of the acts done under it, they were authorized to treat him at that time as never having been a member. There is nothing inconsistent with this view in Holyoke Bank v. Goodman Paper Manuf. Co. 9 Cush. 576, or any of the other cases cited for the plaintiff. As they had received nothing from him, they had nothing to do in order to rescind the contract but to cancel his obligations to them. This they did, and from that time he has been under no obligation to take or pay for any of the stock, nor has he had any right to demand any.

Judgment on the verdict for the defendants