Court Opinion

ID: 6408331
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:50:41.541147+00
Date Added: 2024-06-11T15:51:17.216775
License: Public Domain

Wilde, J.
The plaintiffs’ claim, as stated in their bill, is founded on an agreement between the parties, the construction of which is in some respects doubtful; and, without taking into consideration the proceedings of the parties under the agreement, it would be extremely difficult to ascertain with certainty their relative rights and liabilities. The agreement is very short and indefinite, and it contains no stipulations as to the manner in which the business to which it relates was to be conducted It is as follows: “ To facilitate the communication between Boston and Plymouth, it is deemed necessary that a steamboat be employed, and a wharf erected in Plymouth, the cost of all which is estimated at $10,000. Now, to carry into effect this object, it is agreed by the subscribers hereto, that they will take the number of shares set opposite their respective names, and will pay for each share $100, to such person as maybe appointed by a majority of interest; and that a meeting of the subscribers may be called, to organize the company, by any two of them, whenever the sum of $8000 shall have been subscribed.”
Under this loose and very imperfect agreement, the subscribers, or some of them, after giving notice to the other subscribers of the time and place of their meeting, proceeded to organize the company, and thereupon chose a committee, with full powers to collect the money of the subscribers, and to carry into effect the objects of the association, according to their discretion.
Admitting that the company was thus legally organized, or, if not, that the proceedings at the first meeting were afterwards confirmed at any subsequent meeting of the subscribers, the first question to be decided is, whether the members of the association became chargeable as partners in a joint stock company, or were only joint tenants, or tenants in common, of the steamboat and wharf afterwards purchased by their committee.
On this point, the agreement is not explicit; but the object of it is expressed with sufficient certainty. It was, to facilitate the communication between Boston and Plymouth, by the em *341ployment of a steamboat to run between those places. But by whom it was to be employed, and who were to share in the profit and loss, after the boat should commence running, does not appear by the agreement. But we think it a reasonable inference, as the agreement is silent in this respect, that the understanding was, that the boat should be employed for the use and benefit of the company, in such manner, and upon such terms, as a majority in interest might direct. Admitting this to have been the understanding and intention of the subscribers, it follows, that as the boat was employed, by the authorized agents of the company, for their use and benefit, they were entitled to the profits and were chargeable with the expenses and the debts that were incurred in the prosecution of the enterprise. The several owners of a ship in distinct proportions, although tenants in common of the property, will become partners in a voyage, if undertaken on an agreement, express or implied, to share in the profit or loss that may arise thereon. And such an agreement, we think, may be implied from the proceedings of the parties in this case.
The next question for consideration is, whether the liability of the stockholders be not limited to the amount of the capital which they respectively contributed, or agreed to contribute, to the joint stock. The defendants contend that, at the time they subscribed the agreement, it was understood that their liability was to be thus limited; and they rely on an agreement hereafter to be noticed, between the' members of the committee, with Josiah Robbins and others, in confirmation of this understanding of the parties. The plaintiffs’ counsel admit that this might have been the expectation of the parties ; but they contend that an express agreement to that effect would be no defence, in an action by a creditor of the company against a stockholder or partner, for a debt incurred in the business of the concern. And this is, unquestionably, the law of England and of this country, unless the creditor has notice of the limitation of the liability of the stockholders, they being partners, as stipulated between them. Whether a creditor, who, with a knowledge of such a restrictive stipulation, credits the company, *342would be bound by it, may be doubted. Judge Story considers it as an open question ; but he intimates an opinion, that creditors, with a knowledge of such a stipulation, would be bound by it. He says, “ if they have notice of the qualifying stipulation, and contract with reference to it, it may not be easy to assign a reason why it does not amount to an implied agreement to be bound by it, as much as if it were expressly agreed to.” Story on Part. § 164. This, ho\yever, is not the question now to be decided, which is, whether such a restrictive agreement is not binding on the associates inter sese, and upon the managers, who are appointed to carry into effect the objects of the association. And we cannot doubt that it is thus far binding, and that none of the partners are liable to a claim of contribution which is founded on the violation of such an agreement. That there was such a restrictive agreement, and that it was well understood by the committee, appears clearly, we think, by their agreement with Josiah Robbins and others. That agreement expressly provides for all debts which might be con traded by the committee, on account of said wharf and steamboat, over and above the amount subscribed for that purpose. And it was expressly agreed by the parties that the advances, so contemplated, should be paid equally by the subscriber's to that agreement, and that all profits or losses, arising from such advances, should be divided or borne equally by them.
Now it is most certain that, by these advances, no debt was created, or was intended to be created, against the original stockholders. The advances were not made at their request nor in their behalf, but for the use and benefit of a new company, who expressly agreed to pay the same, and to divide the profits and losses arising therefrom. It was argued, for the plaintiffs, that the object of the new agreement was merely to relieve the committee, in a measure, from any losses they might sustain by reason of the inability of any of the original stockholders to pay their contributive liabilities for the contemplated advances ; and that the word “ profits ” was inadvertently inserted in the agreement. But this argument, or assertion, is wholly without foundation. The language of the agreement is dea., and no *343part of it could be rejected, although it could be proved, by parol evidence, that it did not express the true meaning of the parties.
We are also of opinion, that the committee had no authority to make these advances on account of the original company.
According to this view of the case, the other questions dis cussed by counsel become immaterial; and we are of opinion, that the defence is maintained on two grounds : 1st. Because the committee had no authority to make advances, so as to charge the stockholders with an amount exceeding that subscribed for. The subscribers agreed to pay $ 100 per share, and no more ; and the evidence is entirely satisfactory, to prove that such was the agreement and understanding of the parties. This restrictive agreement was binding upon the parties inter sese, and upon the committee ; for, although the committee had a discretionary power, it was limited, so as “ to carry into effect the objects of the association.” 2d. In the second place, it is perfectly clear that the advances made by the committee, on which the plaintiffs’ claim for contribution is founded, was not in fact made for, and on account of, the original stockholders, but solely on their own account, or on account of the new company.

Bill dismissed.