Opinion
Submitted October 6, 1876
Decided November 14, 1876
John Winslow for the appellant.
F.E. Dana for the respondent.
The due incorporation of the plaintiff is expressly admitted by the answer. But were it otherwise the defendant is not in a position to dispute the validity of the incorporation. He had become a stockholder, acted for several years as a trustee, taken part in its management and contracted with it as a corporation. ( Eaton v. Aspinwall, 19 N.Y., 119; Buffalo, etc., R.R. Co. v. Cary, 26 id., 75; Aspinwall v. Sacchi, 57 id. 331; White v. Ross, 15 Abb. Pr., 66.)
The subscription by the defendant contained in the certificate of incorporation for 250 shares of the capital stock, was sufficient in form and substance, and took effect simultaneously with the filing of the certificate. ( Buffalo, etc., R.R. Co. v. Dudley, 14 N.Y., 336; Lake Ontario, etc., R.R. Co. v. Mason, 16 N.Y., 451, 459, note; Dayton v. Borst, 31 N.Y., 435.)
The allegation of an agreement that the defendant's subscription was to be binding upon him to the extent of fifty shares only, and the allegation that as to 200 shares, the defendant was released and Egerton substituted in his place, are negatived in point of fact by the findings of the referee, and are not sustained by uncontroverted or conclusive proof. It is not necessary, therefore, to consider whether they would have constituted a defence if found to be true.
As to the defence that the company abandoned its business, the referee has found, as matter of fact, that this did not occur until after the commencement of this action. It is immaterial, however, whether it was before or after, as this action is being prosecuted for the benefit of creditors, and it appears that there are judgments against the company for more than the amount recovered of the defendant.
The objection that all other subscribers who have not paid in full should have been joined as defendants, is not available at this stage of the case, not having been taken in the answer, and there being no finding or request to find, nor exception, raising any such point.
The action having been brought by the company before the appointment of the receiver, could be continued in the name of the original party for the benefit of the receiver. (Code, § 121.) The right to collect the unpaid subscriptions was transferred to the receiver. (2 R.S., 463; § 36, Laws of 1852, p. 67; Laws of 1860, p. 699; 2 R.S., 469, §§ 67, 69; Rankine v. Elliott, 16 N.Y., 377; Tracy v. First Nat. Bank of Selma, 37 id., 523.)
The defence that the signature of R. Egerton to the subscription list was not genuine, and that the defendant was misled thereby, was not set up in the original answer. The refusal of the referee to allow it to be set up by amendment, even if he had power to grant the application, was matter of discretion and not the proper subject of an exception.
The claim that the note of $2,790.74, made by Egerton and indorsed by the defendant, should be deducted from the amount due by the defendant on his subscription is not tenable. There is no proof that the company accepted the note as payment, even if the officers had power to do so. Although the note had at one time been in the hands of G.F. Power, as collateral security, he had returned it to the company, and at the time it was produced and offered for cancellation with the consent of Power.
This action was properly brought upon the original subscription and it was not necessary to aver calls. By his subscription, to which no condition or stipulation as to time of payment was attached, the defendant undertook to pay for his shares according to the conditions of the charter. ( Rensselaer, etc., Plank-road Co. v. Barton, 16 N.Y., 457, note; Lake Ontario, etc., R.R. Co. v. Mason, id., 451, 464.) The act under which this company was incorporated, requires that the whole capital stock he paid in within two years. Without intimating that this is a limitation upon the right of the company or the receiver to require immediate payment, it may be observed that the two years had elapsed, and upon any theory the subscription was past due when this action was commenced.
The judgment should be affirmed.
All concur.
Judgment affirmed.