Court Opinion

ID: 5459669
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:31:09.04707+00
Date Added: 2024-06-11T08:32:49.450498
License: Public Domain

By the Court, Roosevelt, J.
The defendants, although partners, carried on their business in the sole name of Fleming ; and the present action is brought on the following contract made by them in that manner:
“100 shares 23 B 30. New York, March 4th, 1856.
I have purchased of Isaac Kip, jun., one hundred (100) shares of the- stock of the Nicaragua Transit Company at twenty-three (23) per cent, payable and deliverable, buyer’s option, in thirty days, with interest at the rate of six per cent per annum. A. Fleming.”
On the trial before the referee the defendant offered to prove that the Rivas government (of Nicaragua) made a certain decree, a certified copy of which was produced, duly authenticated, and that this decree was promulgated in the public square of Granada, the place where decrees are promulgated, the residence of the government, about 18th February, 1856. That the government which made the decree was the government at the time, and had full power and right to make such decree, and that such decree had been carried into effect. The referee, however, excluded the evidence, and, as we think, erroneously. Had the decree been admitted, it would have shown, or at least would have tended to show, that at the time of making the contract, the charter of the company and all its privileges had, without the knowledge of the defendants, been “ revoked and annulled,” and the company itself been “ dissolved and abolished.” It would, in other words, have shown that the thing contracted for had substantially no existence. What the defendants bought, or agreed to buy, was 100 shares of stock in a living company, and not a proportionate, undivided interest in the remaining assets of a dead company in the hands of a receiver.
In the case of Benedict v. Field, (16 N. Y. R. 595,) the court of appeals held that, upon an executory contract for the delivery of goods, to be paid for on arrival, in the notes of a third party, if that party becomes insolvent before delivery, the seller is not bound to deliver the goods and accept the *585notes, although the notes at the time may not ■ he entirely worthless. So that, stating the transaction in another form as an executory purchase of notes to he delivered and paid for in goods at a future time, the authority is precisely in point. The notes of an individual, and the stock certificates of a company, are equally choses in action, and so far as insolvency is concerned, stand on the same footing. The fact that the insolvency in the present case occurred before, instead of after, the date of the contract, can make no difference, as the defendants had no knowledge of the revocation till a subsequent period.
[New York General Term,
May 2, 1859.
Roosevelt, Ingraham and Pratt, Justices.]
The report of the referee, and the judgment entered thereon, should be set aside and a new trial had; costs to abide the event.