The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-06-25

rule OF ineonvensnce utterly ct war with the necess
stock wsl ruinous TO the value Of that species Of
prepsry have spoken OF Schuyler having authority
TO make these ceatidcates The Judgment the sEeca
tsrm does not find this AZ fact this By laws beng silent
ON this point but the Of the defendants admits
70 ana . such charge Of
ths right to issue certificates upon transfer made by
real owner Of the STOCK This admission Is al that is
thus put upon the power in the pleading being only the
construction given BY the defendans themselves as to
the eau,es IN which II might b rightfaIy exercised
eipss to which have referred between the case OF
corporation and that OF individual Both are equal
course Of their employment. lang. 4 Ames on Corp
Sec 382, 81 Com. r., $40; Goodyear vs.. Z. Hsddsm
world :. c.a with
vtiDg the trust and confidence OF the community 70
him IN such capacity The principal In effect undertakes
are rshtfuly done, and that he win stand by the
cent dealer and see him protected; q Parsons Select
a. Of the as the
Of the principal for which he liable, and not that
Of the agent individually for which he alone would be
responsible. The fact that the act is which de-
frauds the principal himself and ia gross abuse of the
agents powers, and Is done without the OF the
not 10 d.ns
with linn, makes no difference in toe application Of
the principle, which has its foundations in tue
very necessities Of justice as between men.
sex Bank, II Hasa, so71 Its true tha. this act Of
he appointed to do what his principals not
htfuly do but that makes difference in the appl
proper acts all agents are in law
and was in the execution OF the powers Of that law
full and in doing act which its face
in itself was lawful and within the express limits Of his
which he was appointed to DO, that he Committed the
lyon Distinction Of this Ln5. would Be ssssasy %
shield him in every instance Of an abuse of power on
the part OF his agent The case s totally unlike that
AZ pf Ca IN vi
what prohibited from doing by law or by its charter
AND has therefore legal capacity todo to that class
Of cases in which agent though acting at the time in
the masters employment, undertakes to do an act
wholly unconnected with that employment the busl
but it is the Of abuse of lawful 20 wer by
agent lawfully appointed BY principal authorised 50
70 appoint and 10 the exercise OF this very lawful aa
OF his powers and according to the custom Of his Office.
Vanderbilt vs. Richmond Turnpike Company, 2 CONS,
more difficult for parties dealing with the agent to dis
cover fraud, which they would be less put upon
inquiry a BY calculated 70 excite suspicion TO
that the agent had by committing such fraud, exceed
cd the powers of his appointment done what he
in every instance Of abuse OF the part OF his
agent the action as virtually upon the certd
tsv
ing against these plaintiffs TO be their astthe
having beeh created BY their wfuy censtsu.ed agent
within the scope Of his legitimate powers and in the
very exercise Of them, though In abuse Of them and
that though the defendants may not be abe by
amount Of their apita and number Of their shares TO
admit the plaintiffs to the rights Of stockholders by
permitting transfer of this stock upon their books.
they IRE NOT on that account at liberty to repudiate
the act the act Of the corporation but must make
compensation to the innocent holders Of the certificates
act which he finds himself unable to perform and
whose default in performance has caused inquiry to
another would be bound to do The rule OF damage In
such case is the damage actually sustained by the
fraudulent act, which in this instance would be the
loaned the credit Of the certif :ate and
the adopted by the special term cannot be objected
affirmed.
ABSTRACT OF OPINION OF JUDGE HOFFMAN.
Judge Hoffman delivered very long opiaion, Of which
the following is sn ABSTRACT
The results which have arrived at, and have endea.
vored In this opinion to sustain may be embodied in the
following proposticns:-
l. It is impossible for me to conceive any ground upon
which any responsibility can be fixed upon the company
which will not depend upon or arise out OF the cert6
cate issusS TO Kyle and deposited with tns plaintiffs
pany through Its agent or representation Of an agent
that the facts stated true, guaranty By tbs
true and an sgr.smsnt TO fulSi them It in
any manner whatever, Il has the element OF conraet
the and an to permit saa
admission upon compliance with certain terms. In my
Judgment then, this action is founded upon the cer
cate, and such certificate comprises contract The
action therefore, tests ON There s not In the
complaint anything at variance with this view
That this contract contains three material particu-
lars FrsThat Kyle entitled to eighty Eve shares
Of the stock Of the company. Second-That the capital
stock three millions Of dollars. Third-Thst the
nominal amount of each share hundred dollars
Fcu1thAnd that upon the production OF that csrt6-
transfer should bs permitted to the holder upon
be literally fully and legally performed By the company
allowing transfer to the PLAINTIFF on the books ad
s all the s
cognzng the fact that the interest ANA share Of the
plaintiffs in the capital and property OF the company was
Of dollars. That all the genuine shares be reduced by
rate or per centage which would yield this That
this the import and this the extent Of the obgs
ton fixed upon the company In favor Of the plaats
by the possession Of the certificate in question: and that
irrespective OF any prohibition, express or implied In
the charter any statute the stockholders could have
entered into such engagement ard bound themselves
by It, That bad the DEFENDANTS fulfilled such contract
Demanded Il would have been the duty Of the directors
to have acertaned the shares OF genuine stock and its
holders and to have adjusted the proportion OF the in
tertss of the latter in the stock of the company, by
abatiDg from each share rate or per centaae which
would amount to the sum Of eight thousand 6vs hun.
be about twenty eight cents and fraction upon cash
share. That the directors refused neglected this
the plaintiffs could have NED Cana as the
laIly situated) to compel It. If the proportion of the
spurious stock TO three millions admitted IT. H. for
pie there was one million five hundred thousand doll ara
Of such stock stated in the surrender Of
half Of the shares OF genuine hede and taking
certificates for half, would elect the object. Bat IL
this method should not be practicable be iu:onve
nept then abatement OF the nominal value OF each
share by rate or per centage sufficient to cover the
amount of the spurious stock would be practical and
effectua That there Is not sufficient ground to sup
pose that discrimination OF the stock cannot be made
SO az to carry this method Of doing Justice to all
That in relation to the effect and operation Of the char
ter Ia not to be conceded that the increase OF the
number Of shareholders for the purpose Of voting
participating In the corporate privileges could work
forfeiture be utterly illegal act towards the State
and that these holders Of certificates were admitted
upon basis to the amount Of their interest which
should leave the capital pre- sey the same the rule of
public policy which dictates limitation Of capital
would not invaded the act would not be unlaw.
full And lastly, that this question for the State
Of Connecticut the courts Of that State to determine
and for them alone. That II could not form q Just
ground for determining the question between these
claimants and the holders of unqusstioned stock
3. That Robert Schuyler had received from the
stockholders such apparent unlimited power
bled him 70 bind the stockholders to perform the stpu