Case Name: SANDERS v. PROCTOR
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1916-04-14
Citations: 158 N.Y.S. 433
Docket Number: 
Parties: SANDERS v. PROCTOR.
Judges: 
Reporter: West's New York Supplement
Volume: 158
Pages: 433–436

Head Matter:
SANDERS v. PROCTOR.
(Supreme Court, Appellate Division, First Department.
April 14, 1916.)
Corporations <§=>100—Subscriptions in Stock—Collateral Agreements.
While the delivery and acceptance oi' treasury stock would raise an implied obligation to pay, the delivery oí certificates of unissued corporate stock to the defendant at the request of M., pursuant to agreement between the defendant and M., raised no implied promise to pay for it, and as between the corporation and the defendant there was no obligation.
[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 450, 451; Dec. Dig. <§=3l00.]
Clarke, P. J., and Smith, J., dissenting.
Appeal from Trial Term, New York County.
Action by Albert Sanders, as receiver, against Frederick F. Proctor, Jr. Judgment for defendant, and plaintiff appeals. Judgment affirmed.
Argued before CLARKE, P. J., and LAUGHLIN, SCOTT, SMITH, and PAGE, JJ.
Louis J. Vorhaus, of New York City, for appellant.
Sumner B. Stiles, of New York City, for respondent.

Opinion:
PAGE, J.
Í think the judgment should be affirmed. The express contract was between M-orris 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 property, which it concededly was not. It was not issued on subscription, for no subscription was made, and 10 per cent, was not paid. 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.
Order filed.
LAUGHLIN and SCOTT, JJ., concur.