Court Opinion

ID: 7968429
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:50.845793+00
Date Added: 2024-06-11T16:34:42.605022
License: Public Domain

Collins, J.
This was an action brought upon the stock subscription under consideration in the same plaintiff against Robbins, 56 Minn. 48, (57 N. W. 317;) the main difference being that the attempted recovery here was for the entire amount subscribed, less five per cent, paid on the first call, instead of for a single installment. We need not discuss all of the points made upon the appeal, which is from an order overruling a general demurrer to an amended complaint.
There is one allegation in this complaint which was not found in that considered in the Bobbins Case, namely that, after signing said agreement, the defendants delivered the same to plaintiff, and plaintiff then and there accepted said subscription agreement, and agreed to deliver said shares so subscribed for by defendants to -iii pm when paid for. It is contended that by this allegation the transaction set forth in the complaint was a purchase of the stock shares, as distinguished from a subscription for shares, and that the complaint is therefore defective and insufficient, because there is no allegation that plaintiff has tendered the shares, and none that it is able and willing so to do.
In Columbia Electric Co. v. Dixon, 46 Minn. 463, (49 N. W. 244,) the rule was laid down that it was no defense to an action on a subscription for stock shares to allege in the answer that the corporation had not delivered or tendered the certificate to which the subscriber was entitled. Citing that case, and also referring to the *459earlier one of St. Paul S. & T. F. R. Co. v. Robbins, 23 Minn. 439, which at first impression seemed to he at variance, it was held in Marson v. Deither, 49 Minn. 427, (52 N. W. 38,) which was brought by an assignee in insolvency to recover forty per cent, of an amount subscribed for stock shares, that it was not necessary to allege a tender of the stock certificate in the complaint. The court below, when making its order, as well as counsel for plaintiff in the argument, relied upon the last-mentioned case as governing the one at bar on this particular point. We do not think so. The transaction, as alleged in the complaint now before us, was unlike that set out and considered in the Marson Case. It is expressly averred here that upon the delivery of the subscription agreement by defendants, and its acceptance by plaintiff, the latter agreed to deliver the stock shares subscribed, to the former when paid for; and the action is brought, not for a single installment of the amount subscribed, but for all that can become due in any event, — for the final installment among others. Under the language used in the agreement it seems plain that the delivery of the shares by plaintiff, and payment of the final lnstallment by defendants, were intended to be concurrent acts, one dependent oh the other. In this respect the transaction is easily to be distinguished from that considered in Marson v. Deither.
It is claimed by defendants’ counsel that the complaint is defective, not only because it does not contain an averment of readiness and willingness to issue and deliver the stock shares, but because it fails to allege a tender thereof. A reasonable construction, it is said, must be put upon, and some effect attributed to, the language of the agreement, which was that plaintiff was “to deliver the said shares so subscribed for by defendants to them when paid for.” We think that this language cannot be ignored, for under it the right to enforce full payment cannot be regarded as distinct and independent from the ability and willingness to deliver the shares. The acts must be regarded as contemporaneous. The defendants were to pay and the plaintiff was to deliver at the same time. If the latter is not in position to comply with its part of the contract, there should be no enforcement as against the former. And we think that there should, at least, have been an allegation in the complaint that plaintiff was ready and willing to deliver the certificates of stock. An *460action to enforce payment of stock subscriptions may be maintained, it is said, without a previous tender of stock certificates, and this is true even though the contract may provide for their issue upon payment. A readiness and willingness, however, to deliver the certificates must be alleged in the complaint in actions for the whole amount subscribed, or to enforce payment of the final installment of the amount subscribed. James v. Cincinnati H. & D. R. Co., 2 Disney, 261; Clark v. Continental Imp. Co., 57 Ind. 135; 2 Beach, Priv. Corp. § 574; Cook, Stock & Stockh. § 192. It is true that plaintiff’s counsel have set forth its cause of action in the complaint, which, as before stated, was for the entire amount of the subscription, less five per cent, paid on the first call made by the board of directors, as if it actually consisted of seireral causes of action. The subscription called for payment in installments as the board of directors might require and direct by resolution, and, in the complaint, each of these calls is set out, with other essential allegations, by itself, as fully as if the action had been brought for a single installment. But the fact that, as to each of these installments, the allegations are complete and sufficient, will not prevail as against a general demurrer, for the complaint must be taken as stating a single cause of action, namely, the recovery of the balance of the subscription remaining due and unpaid. The plaintiff would not have been permitted, when it brought this action, after the last call or assessment was made, to split its cause of action, and to bring separate actions for each installment. Hence, the complaint really contained but one cause of action, and is to be so treated.
As to the other alleged defects, we think the pleading is not open to the charge that it failed to state a cause of action. Order reversed.
The Chief Justice, absent, serving as a member of the state board of regents, and Buck, J., absent, sick, took no part.
(Opinion published 59 N. W. 532.)