Case Name: Albert Sanders, as Receiver in Proceedings Supplementary to Execution under a Judgment Recovered by Bernard Latiner, Plaintiff and Judgment Creditor, against Wonderland Amusement Company, Inc., Defendant and Judgment Creditor, Appellant, v. Frederick F. Proctor, Jr., Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1916-04-14
Citations: 172 A.D. 713
Docket Number: 
Parties: Albert Sanders, as Receiver in Proceedings Supplementary to Execution under a Judgment Recovered by Bernard Latiner, Plaintiff and Judgment Creditor, against Wonderland Amusement Company, Inc., Defendant and Judgment Creditor, Appellant, v. Frederick F. Proctor, Jr., Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 172
Pages: 713–718

Head Matter:
Albert Sanders, as Receiver in Proceedings Supplementary to Execution under a Judgment Recovered by Bernard Latiner, Plaintiff and Judgment Creditor, against Wonderland Amusement Company, Inc., Defendant and Judgment Creditor, Appellant, v. Frederick F. Proctor, Jr., Respondent.
First Department,
April 14, 1916.
Corporations — obligation to pay for unissued stock delivered at request of third party.
The delivery of certificates of unissued corporate stock to one party on the request of a third party does not raise an implied obligation to pay the corporation therefor.
Since there was no obligation between the third party and the corporation, it cannot take advantage of an express contract between the third party and the party to whom the stock was delivered on the theory of Lawrence v. Fox (20 N. Y. 268).
The delivery and acceptance of treasury stock, however, raises such an obligation.
Smith, J., and Clarke, P. J., dissented, with opinion.
Appeal by the plaintiff, Albert Sanders, as receiver, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 6th day of February, 1915, upon a dismissal of the complaint by direction of the court at the close of the case, both sides having moved for the direction of .a verdict.
Louis J. Vorhaus, for the appellant.
Sumner B. Stiles, for the respondent.

Opinion:
Page, J.:
I think the judgment should be affirmed. The express contract was between Morris and Proctor and the corporation cannot take advantage of it on the theory of Lawrence v. Fox (20 N. Y. 268) because there was no obligation between Morris and the company.
This was unissued stock, not treasury stock, i. e., stock which had been duly issued and turned back into the treasury of the company. The stock was not legally issued. It could only be issued for cash or labor or property which it concededly was not. It was not issued on subscription for no subsóription was made and ten per cent was not paid. (See Stock Oorp. Law [Consol. Laws, chap. 59; Laws of 1909, chap. 61], § 53, 55.) While the delivery and acceptance of treasury stock would raise an implied obligation to pay, no such obligation, as I understand, is raised by the delivery of certificates of unissued stock to one man on the request of a third. It was pursuant to the agreement between Morris and the defendant that the stock was issued and not at the instance and request of the defendant. As between the company and the defendant there was no obligation, express or implied, to pay for the stock to the company.
Laughlin and Scott, JJ., concurred; Clarke, P. J., and Smith, J. dissented.