Court Opinion

ID: 5469616
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:26:34.714722+00
Date Added: 2024-06-11T08:33:15.333481
License: Public Domain

Clerke, J.
It is beyond dispute that Henry Van Schaick was the mere trustee of the unincorporated company in receiving this lease, who were, in fact, though not technically, according to the common law, the original lessees of the term. It is also clear that this company, at the time this lease was taken for their benefit, contemplated becoming an incorporation—their condition then being merely preparatory to the ultimate design, (see articles 8 and 15 of the association.) They agreed, while unincorporated, that they and the company thereafter to be formed (meaning the incorporation) would assume, and thereby the association did assume, the performance of all the covenants in the lease. The intentions indicated by all the arrangements made, and the provisions in the articles of association, manifest an intention of making the incorporation, in all respects,* identical with the association. It had the same object, the same business, the same plan of operation, the same property, and the same liabilities. It had the same members generally, although some of the members of the association did not become members of the incorporation; but this change of members would not have affected the identity of the former, as in the case of an ordinary copartnership. According to article eight of the articles of association, it is expressly provided “ that the company shall not be dissolved by the death or act of any member, but his successor or successors in interest shall stand in his place.” The incorporated company, then, is as much the same body in fact, as if the'- association had continued unincorporated. *462The incorporation under the general law was resolved upon merely for the convenience of business and the protection of its members from unlimited liability—not for the purpose of adopting’ a new character, and changing its relations to those with whom it had previously entered into engagements or transacted business. Any attempt now upon the part of the corporation to get rid of the liabilities of the association on the technical ground that it is a different person in law—one artificial person instead of many natural persons—is just such an attempt as a court of equity, regarding all the circumstances, should intervene to defeat and prevent. It will deal only with the substance and real facts of the case, and forbid the employment of a technical rule, and, I may say, a metaphysical conception, to work palpable injustice. It is eminently a case for the interference of a court of equity. When we also consider the testimony of Reynolds, the president of the association, and also of the same body in its incorporative state, it is apparent that the incorporation recognized this lease as taken for their benefit, and that it was held in trust by H. Van Schaick for them. To be sure, he says he could not find the resolution by which the lease was accepted ; but it was accepted, and used by them; they continuing in occupation of the premises precisely in the same manner as the company. I agree, therefore, with the justice who presided at the special term, in saying that the defendants are the real owners of the lease, and that H. Van Schaick held it for their benefit.
The case comes within the principle stated by the Lord Chancellor in Walters agt. Northern Coal Mining Co., (5 De Gex., McNaughton & Gordon, p. 629,) that if there was a previous contract between the cestui que trust and the landlord, that they should accept and he should grant the lease, the landlord would be entitled to the relief sought.
The judgment should be affirmed, with costs.