Court Opinion

ID: 5512849
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:25:15.637947+00
Date Added: 2024-06-11T08:34:12.411733
License: Public Domain

*61By the Court,
Sutherland, J.
The verdict of the jury settles the question of fact, that the $50 paid by Richards to the Murrays on the 8th of April, 1825, and which he now seeks to recover back, were paid generally on account of his subscription to the stock of the steam brig “ The New-York,” and not upon any special contract or understanding, express or implied.
The court properly instructed the jury, that if the ten per cent, was paid in for the purpose of creating a fund for making the experiment of one or more voyages with the brig to Norfolk, and had been expended for that purpose, or if the defendants were mere agents in receiving and appropriating said payment to a particular object, then, in either of those cases, the plaintiff ought not to recover; and that it was their province to determine whether the plaintiff had paid in the ten per cent, for such special purpose, and whether the defendants were or were not such agents. This part of the opinion of the court is not complained of.
The case then turns upon the question, whether the association for the purchase of the steam brig, “ The New-York,” was complete, so that the associates W'ere partners when the plaintiff paid the ten per cent, instalment to the Murrays, or whether it was still inchoate and not to become complete, either until the whole number of shares was subscribed for, or until the title of the vessel was transferred to the stockholders. If the individuals who had at that time subscribed to the stock, were, in judgment of law, joint owners of the vessel, and partners in the contemplated enterprise, then the money paid by the plaintiff was an advance by one partner to the stock of the firm, and cannot be recovered back in an action, at law; The court below, however, held that it was not a case of partnership; that the ten per cent, advanced by the plaintiff was paid as a part of the consideration for the purchase of the vessel; and that the vessel having been destroyed before she was transferred to the subscribers of the stock, and it having become impossible by that event for the owners of the vessel to comply with the contract on their *62part, that the consideration on which the plaintiff paid the iers per cent, had failed, and he was entitled to recover it back. I am inclined to think that this was a correct and legal view of the transaction.
The vessel in question'was the joint property of the Murrays, Jonathan Bartlett, Francis Barretlo and W. S. How-land. The proprietors being desirous of disposing of the vessel, fixed her value at $25,000, and agreed to divide it into one hundred shares of $250 each. They employed an agent to procure subscribers, to form a company which should purchase the brig, and which brig, when purchased, should constitute the joint stock of the company. The paper or agreement which was circulated for subscription, slated that the subscribers thereto agreed to take the shares by them severally subscribed in the steam brig, “ The New-York,” and upon the following conditions : The vessel was valued at $25,000» The stock of said company or association was to be divided into one hundred shares of $250. One fourth of each subscription to be paid in cash to John B. Murray and son, on delivery of the bill of sale of said vessel, and the remainder or balance at three, six and nine months, and each share to be entitled to one vote. Five directors to be chosen from among- the stockholders, and the vessel to be employed as a packet between the ports of New-York, Norfolk and Richmond. These are the essential provisions contained in the instrument. Of the one hundred shares, only forty-seven were ever subscribed for, and twenty-one of those forty-seven were subscribed by the owners of the brig. Richards, the plaintiff, subscribed for two shares. The instrument is dated February, 1825; and on the 8th of April ensuing, the plaintiff paid to the Murrays $50, for which they, by their clerk, gave the following receipt: “ Rec’d of J. O. B. Richards the sum of fifty dollars, being an instalment of 10 per cent, on two shares, by him subscribed to the stock of the steam brig New-York.” It is to be remarked, that no money was to be paid by the subscribers, nor any other act to be done until a bill of sale of the vessel was delivered. One *63fourth of each subscription was to be paid on delivery of the bill of sale. Until that was delivered, there was no subject in which the subscribers had a joint property or interest. The brig was to constitute the stock of the company; and, until they became possessed of that, either by actual delivery or by a bill of sale, they had no legal title whatever in her. The agreement is silent as to the time when the company or association should be considered as formed. But the time is fixed by the strongest implication, from the very nature of the transaction. The sole object of the association was to purchase the brig. Whenever, therefore, the stock which was necessary for that purpose should be subscribed, and the title of the brig vested in the stockholders, then the company was to be considered as formed, and not before. It is not necessary to decide, whether any subscriber was bound by his subscription, unless the whole number of shares was taken up.
The owners of the brig not having executed a bill of sale of her to the subscribers to the stock, which, by the very terms of the contract, is made a condition precedent to the payment of any portion of their subscription, it appears to me that the company never had a legal existence. That the vessel was at the risk of the owners until the bill of sale was executed, or the vessel itself delivered to the stockholders or subscribers. There is no legal evidence that she ever was delivered to them, or that the control exercised over her by the defendants was exercised in the capacity of agents of the subscribers. There is no legal evidence that the company was ever organized by the choice of directors, or that the subscribers ever appointed the defendants their agents. The subsequent acts, both of Bartlett and the Murrays, shew that they considered the contemplated sale of .the brig, by means of the formation of a company, as having failed. They treated her as their own individual property ; and when she was destroyed, she was in the possession of the Murrays, who had sent her to an eastern port to be sold. There is no pretence that it was done either by the direction or for the benefit of the subscribers to the contract of February, 1825. *64There was no partnership, therefore, in the case. The plain-^Pa^ money on account of a contract for the purchase °f the brig, which contract was never fulfilled on the part of the defendants and her other owners. The consideration, therefore, has failed, and he is entitled to receive it back.
Judgment affirmed.