Court Opinion

ID: 5180334
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:41:13.163037+00
Date Added: 2024-06-11T08:26:33.005209
License: Public Domain

Hardin, P. J. (dissenting):
Inasmuch as the trial court directed a verdict in favor of the •defendant “ the plaintiff is entitled to the most favorable inferences ■deducible from the evidence, and all contested facts are to be •deemed established in his favor.” (Rehberg v. Mayor, 91 N. Y. 141; Bond v. N. Y. C. & H. R. R. R. Co., 69 Hun, 476.)
*608Upon all the evidence presented at the trial a question of fact arose as to whether the transfer by the defendant of the shares of stock was made by him in good faith. If the transfer was made in good faith and without fraudulent intent, his liability by reason of having held the ten shares of stock may have been discharged. As the case was situated the burden was upon the defendant to establish that the transfer was in good faith.
In Cutting v. Damerel (88 N. Y. 410), relied upon by the defends ant, the court reached the conclusion that the transfer was made in good faith, and, therefore, a recovery was not allowed.
In the case of Tucker v. Gilman (121 N. Y. 189) it was held that stockholders may divest themselves of the liabilities incident to their relation to the corporation, “ when they have actually, and in good faith, transferred their stock in the manner provided by law.” In that case it was held error to reject evidence tending to show that a transfer had been made of the stock in good faith.
In Billings v. Robinson (28 Hun, 122) it was held that the stockholder would be hable “ unless it appears that he sold the stock in good faith, and with the intent and purpose of disposing of liis entire interest in the shares and surrendering all dominion over them.” The prevailing opinion in that case discusses the facts, and reaches the conclusion that the sale in that case was in good faith. / Barker, J., who delivered the prevailing opinion, expressly disavows any intent “ to infringe upon the general legal proposition that it is essential for the seller of shares, to make the same available and to exempt himself from liability to pay future calls, that the sale should be absolute in terms, and, in fact, without any right in law or equity remaining in the transferrer to demand a return of the shares from the transferee, and thus to share in the future prosperity of the corporation.”
. (2) In August, 1890, the defendant executed an agreement, wherein, he subscribed for twenty shares of the assessable stock of the proposed company. The agreement subscribed by him contained the following language: “ We, the undersigned, hereby agree to form a company to be duly incorporated under the laws of the State of New York, for the purpose of purchasing and dealing in real estate. * "x" * And that we hereby subscribe for the num*609her of shares of the assessable stock of the said, proposed, company set .opposite our respective names. * "" w To meet the first payment on purchase price of property and for necessary expenses, and improvements, we hereby agree to pay thirty per cent on the amount of the assessable stock subscribed for by us.” Subsequent to the agreement so subscribed, and in September, 1890, the defendant, and other subscribers, organized the plaintiff as a corporation under the manufacturing statute of 1848 (Chap. 40), and the acts amending the same. The defendant became a director in September, 1891, and was a member of the finance committee of the board, and attended numerous meetings and conferences had in respect to the affairs of the company prior to March 4, 1892, the time of the alleged transfer of his'shares of stock. At some of the meetings-the question of making assessments upon the assessable stock, and ■other questions relating to the financial condition and policy of the plaintiff, were discussed.
Defendant’s transfer to Van Every was of the ten shares before mentioned, as well as the twenty shares, and at the same time two shares that stood in the name of his son. The son took the shares to the office, and had them transferred on the books to Van Every. There is some conflict in the evidence as to some of the circumstances attending the transfer to Van Every, who was a waiter in a restaurant where the defendant took his dinner, and the evidence indicates that Van Every never had any property, and that the transfer to him was for a small sum. Van Every only kept the stock some two weeks when he called upon the defendant, who told him he had found a purchaser, and Van Every was introduced to the supposed purchaser, and offered to sell the stock for five dollars, and, apparently, upon receiving the five dollars, assigned the stock and delivered the certificates as evidence of it, although no actual transfer seems to have taken place upon the books of the company. Defendant relied upon the alleged transfer to Van Every as a defense to both claims made by the plaintiff, and in considering whether that position was maintainable or not, it was important at the trial to have the fact determined that the transfer was bonco fide, and that question, upon the evidence presented in this case,' was one of fact which should have been submitted to the jury.
Note —The other, cases of this term will be found in the next volume; 5 App. Div.— [Ébp. '.
At the close of the evidence a motion was made by thé defendant that a verdict be directed in his favor, and the motion was granted and an exception was taken. Thereupon it ivas'-ordered that the exceptions taken by the plaintiff upon the trial be heard in an appellate court in the first instance.
The foregoing views lead to the conclusion that-' the': exceptions should be sustained and the verdict set aside' and a- new trial ordered,.-with costs to abide the event. ' ; "
Adams, J., concurred.
Motion, denied, with' costs, and judgment on the verdict ordered' for the defendant, with costs. .