Court Opinion

ID: 3606028
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:51:27.79492+00
Date Added: 2024-06-11T09:36:06.182453
License: Public Domain

The agreement, to enforce which this action was brought, seems to have been that the testator should subscribe for $1,000 of the capital stock of the Diamond Mills Manufacturing Company, one-half of which should belong to the defendant, the testator to hold the same and receive the dividends thereon, the defendant to pay the interest annually on the $500, and when the intestate wanted the $500 he was to notify the defendant, and if he did not pay, the intestate should sell the same, and the defendant would pay the difference between the sum received on such sale and the par value of the stock.
A few years after the intestate subscribed for the stock, the company became insolvent, and the stockholders were *Page 70 
called on to pay an amount equal to the stock held by them to pay the debts of the company, and the intestate paid $1,000, and $500 of that sum is also claimed in this suit. It was a part of the bargain that the agreement should be put in writing, but it never was.
By the contract the intestate paid for the defendant, and at his request, $500, which was to be repaid by the defendant. One-half of the stock subscribed for became and was the property of the defendant, although it stood in the name of the intestate. It was tendered to the defendant before suit brought, and thus the liability of the defendant perfected, so far as the ownership of the stock was concerned.
By the contract the intestate was bound to sell the stock, and in that way reimburse himself so much of the amount paid as the stock would bring on the sale. No sale was made, and hence it is claimed a condition precedent to a recovery in this case has not been performed.
But it clearly appears that the company had become insolvent, and its stock utterly worthless; there was nothing to sell. The defendant was clearly liable for one-half the amount paid for the stock.
The intestate, being the nominal owner of the whole stock, was liable to the company, or the creditors, to pay $1,000 in satisfaction of the debts of the company. On the facts proved, there is no reason to doubt the power of the creditors to enforce the payment of this sum; and that being so, the intestate was not bound to wait until he was sued and judgment recovered, before he paid.
But it is said that the intestate was a trustee of the defendant's share of the stock, and hence not liable to be sued for it. Neither the company nor its creditors had any notice of any trust, and whether the intestate might have paid his own half and on informing the company or creditors of the manner in which he held the defendant's share, have given it or them a right of action against the defendant, *Page 71 
is not very important. While it stood in the intestate's name he was liable for the whole; and he has paid $500 for the defendant's benefit, which the defendant was equitably bound to pay.
It is just and right that executors, administrators, guardians of minors, and others, trustees of express trusts, should not be liable for debts of a corporation in which they hold stock in their fiduciary capacity. But there is no reason why a person holding stock as the intestate held that belonging to the defendant, should be exempt. The statute exemption does not reach the case.
It is said the contract as to the stock was never binding because by its terms the agreement was to be put in writing, and it was not. Conceding that the defendant might have insisted on the performance of this condition, it was competent for him to waive it; and he seems to have repeatedly recognized his liability on the contract, although it had never been reduced to writing and signed.
After a careful consideration of all the points raised by the defendant's counsel, I can discover no grounds on which the judgment can be reversed. It is therefore affirmed, with costs.
JOHNSON, J., was in favor of a reversal. All the rest of the judges being for affirmance, judgment affirmed. *Page 72