Court Opinion

ID: 8655843
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:15:51.306115+00
Date Added: 2024-06-11T16:56:41.615267
License: Public Domain

ON APPLICATION POR. REHEARING.
FRICK, J.
Counsel for appellant has filed a petition for a rehearing in which he strenuously insists that we erred in our con-*297elusions. Without presenting any new arguments in support of his contentions, counsel with some vigor insists that we have not sufficiently met those he originally presented, and that we have failed to give them full consideration. Moreover, he contends that we have “unfairly stated his position.” This contention is based on our statement in the opinion that counsel had presented “elaborate arguments to convince us” that his “client should be relieved from the obligation he has assumed by signing the agreement we have set forth.” What counsel specially excepts to in that part of the statement is that appellant had assumed an obligation by signing the agreement. No doubt, if one is inclined to limit himself to a mere legal technicality, it could be contended that until it is judicially determined that one is legally bound he has assumed no obligation. By reading all that is said on the subject in the opinion, however, it is manifest that we used the term “obligation” in a broad rather than in a narrow or technical sense. It certainly requires no argument to prove that when appellant had signed and delivered the agreement, as he concedes he did, he, prima, facie at least, had assumed an obligation, and that the question presented to the court, was whether it was legally enforceable. It was in that sense, and in no other, that we made the statement, and we can see no good reason to change or modify it.
It is also contended that we placed a wrong construction on Comp. Laws 1907, section 332, which section we set forth in full in the opinion. It is, however, said by counsel that, although our construction be wrong, yet it does not necessarily affect the result. He insists that we have construed the term “stockholder” too broadly. If counsel will carefully examine the authorities with regard to the various meanings that are applied to the term, he will perhaps in time agree with us that we have not seriously transgressed in using the term in the sense we did. We have discovered no reason why we should modify the opinion in that regard, and it is adhered to.
*298It is further contended that, in order to have treated appellant and bis counsel “fairly,” we should hare given some reason why we refused to “follow, distinguish, or explain” the ease of Sedalia, etc., Ry. Co. v. Wilkerson, 83 Mo. 235. It is true that counsel had specially referred ns to the decision of that case, and in his brief and oral argument insisted that the decision fully sustained his contention that appellant was not bound by the agreement we have set forth in full in the opinion, for the reason that by virtue of N. S. Mo. 1899, section 1034, a person does not become a stockholder of a corporation unless and until he signs the articles of incorporation, although he may have signed a preliminary agreement to take stock or to become a stockholder in it after organization. We did not specially refer to that case in the opinion. We had, however, carefully examined the same, together with all of the others that counsel had cited, and we so stated in the opinion. It did not occur to us that-it was our duty to either “follow, distinguish, or explain” all the cases that counsel was pleased to cite from foreign jurisdictions. In view, however, that counsel seems to think that unless we do so he is not being fairly treated, we shall at least make the attempt to “explain” the Wilkerson Case. The opinion in that case is a commissioners’ opinion and is based entirely upon the section of the Missouri statute, to which we have referred. The opinion is by two out of four-commissioners constituting the commission. We read and considered that decision carefully, and after doing so we had no difficulty in arriving at the conclusion that the conclusion reached by the two commissioners was unsatisfactory for the reason that, instead of passing upon the question of whether a person could bind himself by subscribing for stock by entering into a preliminary agreement to take stock in a corporation to be organized, the commissioners broadly held that by signing such an agreement one did not become a stockholder under the Missouri statute, and in view that he did not he was not bound to take or to pay for stock subscribed for in such an agreement. The question we passed upon, however, was whether one could bind himself by a prelimi*299nary agreement .that he would, npon the organization of a corporation, take and pay for a specified amount of stock in ■such organization when organized. We further held that there was nothing in our statutes nor in the common law prohibiting the making of such an agreement; and hence it was legally enforceable, and to that effect is the overwhelming weight of authority. While the Missouri statute is neither in terms nor effect quite like ours, yet we can see no reason why the commissioners arrived at the conclusion they did in the Wilkerson Case. The Missouri statute' referred to governed the organization of railroad corporations only. The organization of corporations generally in that state is, as it is in this state, governed by a separate statute. Under the latter statute the Supreme Court of Missouri in the case of Griswold v. Seligman, 12 Mo. 110, decided prior to the Wilkerson Case had arrived at a contrary conclusion. Mr. Chief Justice Sherwood, who certainly was the equal as a lawyer of any judge who has graced the supreme bench of that state, in the headnote to Griswold v. Seligman, supra, states the law in the following words:
“One may render himself liable as a stockholder in a corporation as well by his conduct in respect to the stock of the corporation as by formal subscription and acceptance of stock.”
The case just referred to was decided in 1880 by the Supreme Court of Missouri, while the Wilkerson Case was decided in 18.84 by the commissioners as aforesaid. No mention of the Griswold Case is made in the Wilkerson Case and is therefore neither “followed, distinguished, nor explained,” in the latter case. If, therefore, the Supreme Court of Missouri does not feel called on to follow, distinguish, or explain its own decisions, we can see no reason for-doing so, especially where, as in this instance, the decision relied on is directly contrary to the overwhelming weight of authority.
In saying what we have in this regard, we are not unmindful of the fact that counsel claims that the Wilkerson Case is based upon a special statute and hence does not fall within *300the general current of authority. We have, however, said (and we repeat it here) that there is nothing in the Missouri statute that prevents any one from entering into an agreement to subscribe for stock in a corporation to be organized in the future, and hence the law ought to be as it is declared to be by Mr. Chief Justice Sherwood in the foregoing quotation. If one may by conduct become bound as a stockholder without either signing the articles of incorporation or accepting the stock as declared by the eminent Chief Justice, why may he not be bound by a preliminary agreement into which he voluntarily enters ? That he may do so is squarely held to be the law in California in the following cases: Marysville, etc., Co. v. Johnson, 93 Cal. 538, 29 Pac. 126, 27 Am. St. Rep. 215; s. c., 109 Cal. 192, 41 Pac. 1016, 50 Am. St. Rep. 34; San Joaquin L. & W. Co. v. Beecher, 101 Cal. 70, 35 Pac. 349.
While we could have cited the foregoing cases in the opinion, with many others, yet we did not deem it necessary to do so in view of the copious quotations we made from the test-books where the authorities in support of the text are collated.
It is next contended that we failed to determine the question of whether the corporation after it was organized had accepted the agreement entered into by appellant. We did not deem the question worthy of special consideration in view of the fact that it is generally held that the bringing of an action upon the agreement constitutes a sufficient acceptance. In this case, however, it is conceded that the corporation had sent out ten separate notices or calls to all the subscribers, including appellant, demanding payment of the installments' of the stock subscribed for as the same became due under the terms of the contract signed by appellant. This, in and of itself, constituted an acceptance, and in view that it stood unquestioned we did not deem it necessary to enlarge upon it.
*3018 *300Again it is urged that we omitted to decide the question of whether a tender of the stock subscribed for by appellant was necessary before payment therefor could be enforced. *301From wbat was said at tbe bearing, we assumed tbat tbe question was one merely of formality, on wbicb appellant would not insist. In view tbat be insists upon it now, all tbat it is necessary to say is tbat tbe authorities are to tbe effect tbat neither allegation nor proof tbat tbe stock was tendered is necessary in an action like tbe one at bar. Columbia Elec. Co. v. Dixon, 46 Minn. 463-466, 49 N. W. 244; Marson v. Deither, 49 Minn. 423, 52 N. W. 38; New Albany, etc., Ry. Co. v. McCormick, 10 Ind. 499, 71 Am. Dec. 338. But, entirely apart from all authority, bow often must it be decided tbat where- it appears, as in this case, tbat a tender would have been wholly useless no tender is necessary ? While there are a few sporadic cases, perhaps, tbat in particular cases have departed from tbat general principle, yet tbe great weight of authority is to tbe effect tbat where tbe evidence without conflict shows, or where it is found, tbat a tender would have been useless, none is required to be either alleged or proved.
9 Finally it is contended tbat we did not pass upon tbe contention tbat respondent cannot recover because it did not prove tbat it bad tbe amount of stock in its possession to deliver to appellant. We think now, and so thought when we wrote tbe opinion, tbat tbe record is conclusive tbat it bad tbe stock. As we remarked in tbe opinion, tbe articles of incorporation were introduced in evidence, and from them it affirmatively appears just who are stockholders and bow much each one has taken in tbe corporation, together with tbe total amount of stock authorized to be issued, and prima- facie at least'it also appears tbat respondent bad in its possession more than sufficient stock to supply appellant with tbe amount subscribed for by him. All of tbe foregoing propositions were necessarily decided against tbe appellant in tbe conclusion reached; and in view tbat in our opinion they bad to be so decided, and inasmuch as tbe judgment was affirmed, we did not think tbat we were required to prolong tbe opinion by specially passing upon each proposition. Under ordinary circumstances we t.hink counsel would have agreed with us. His zeal for tbe in*302terests of bis client no doubt bas induced bim to demand more from the court than was really necessary. While zeal is a most commendable quality in an advocate, yet it may mislead and deceive bim. Zeal may, and no doubt often does, affect tbe mind of tbe eager attorney, as tbe magnifying lens affects tbe eye of tbe zealous observer; it magnifies and at times distorts tbe subject to tbe former as it may tbe object to tbe latter, while to all others both tbe subject and tbe object retain their natural and ordinary proportions. It is but natural, therefore, that tbe zealous attorney must at times suffer keen disappointment in tbe results reached by an impartial tribunal. This case is but an illustration of tbe truth of tbe foregoing statement. Moreover, counsel bas entirely overlooked tbe fact that in one sense at least tbe right of individuals to enter into and bind themselves by contract with respect to all matters not prohibited by express statute or by a sound public policy is involved. We are asked to deny such a right to many for tbe sake of relieving one from an obligation which be may think onerous. Thus is again exemplified Edmund Burke’s great aphorism: “The people never give up their liberties but under some delusion.” It would be nothing less than a delusion if we should surrender tbe right to contract upon tbe subject in question for tbe reasons urged by counsel. Tbe duty of tbe courts is to foster and protect tbe right, and not to hamper it or fritter it away by indulging in legal technicalities.
No reason having been shown why tbe conclusion reached by us should not prevail, tbe petition for a rehearing should be, and it accordingly is, denied.
Me CANTY, O. J., and STB.AUP, -I., concur.