Case ID: ny-st-rep_54/html/0363-01.html
Source: Caselaw Access Project
Author: {"author": "Barnard, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Sessions, App’lt, v. John D. Elwell, Resp’t. Archibald L. Sessions, App’lt, v. John D. Elwell, Resp’t.
    
      (Supreme Court, General Term, Second Department,
    
    
      Filed July 28, 1893.)
    
    .Specific performance—Agreement to transfer stock of company to BE ORGANIZED.
    Defendant agreed to transfer to plaintiffs stock in a certain corporation which he was attempting to organize. He failed to obtain capital for that purpose, and a similar corporation was organized in West Virginia by another person, in which defendant was interested. Held, that the agreement could not be enforced as to stock in the latter company.
    Appeals from judgments in both actions dismissing the com’■plaints.
    Actions for specific performance of contracts to deliver shares -of stock,
    
      A. L. Sessions (Jesse Johnson, of counsel), for app’lts; Eustace Conway, for resp’t.
   Barnard, P. J.

The issues in each of these actions are the same. The action is brought by each of the plaintiffs for the specific performance of an agreement under which the defendant agreed to deliver 100 shares of the full paid capital stock in certain corporations, which were expected to be organized through the efforts of the defendant as a promoter. No such corporation was organized as was called for by the agreement between the parties. Another corporation was chartered in West Virginia, and the owner of the patent, Gibbon, transferred the patent right to that company. The question of fact presented and tried was whether the defendant really obtained this West Virginia charter, and in consequence thereof is entitled to the shares of stock provided for by the agreement, which would have been his right had he succeeded as promoter. The trial judge has found that the defendant was not instrumental in forming the West Virginia corporation. It is not disputed but the corporation contemplated by the defendant failed to become an existing one. The new corporation was procured by Luther B. Shinn. Gibbon so testifiesShinn refused to have any preliminary dealings with defendant,, and the new company demanded a transfer of the patents from Gibbon, and in hostility to the contract between Gibbon and Elwell. The fact that the new company was procured to be organized by Shinn, and that it was organized because Elwell was:, unable to organize one for the purpose of using the Gibbon patents ; that the new company was independent of, and distinct from, the one which defendant attempted to create, but failed to-do on account of his inability to procure the necessary capital, seems plainly proven. The defendant was free to enter into new arrangements upon the failure of those made with Gibbon, and under which the plaintiffs had advanced money, but which have-resulted in nothing.

The judgment should, therefore, be affirmed, with costs.

Dykman and Pratt, JJ., concur.