Court Opinion

ID: 6578034
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:36:01.843844+00
Date Added: 2024-06-11T15:56:54.137909
License: Public Domain

Hinsian, C. J.
The defendant was factorized as the debtor of the New York and Boston Railroad Company; but his counsel claimed on the trial of this action, which is an action of scire facias founded upon that attachment, that there never was a legal organization of any such corporation, and that *576therefore there' could be no debtors to it, and consequently that there could be no recovery against him or his representatives. The superior court decided that the record of the stockholders’ meeting, which was held for the purpose of organization, in pursuance of notice given for that purpose by the persons named in the charter, and authorized to call such meeting when $500,000 of the capital stock was subscribed, was sufficient evidence of the organization; and that, unless the evidence was rebutted by other proof, it was to be taken as true, and the organization thus proved as legal. A very similar question was raised in the late case of The Litchfield Bank v. Church, 29 Conn., 137. And it was held in that case that the doings of commissioners in calling the first meeting of the stockholders, after they had determined that the whole amount of the capital stock was legally taken, was final upon the question whether the bank was in that respect legally organized. It was 'said in that case that, as the commissioners were only authorized to call a meeting of the stockholders when the requisite amount of stock was subscribed, they must of course determine when that amount was subscribed, and in so determining must judge of the legality and good faith of the subscriptions. As the court below went no further, perhaps not so far, as this, we think the defendant has no reason to complain of the ruling.
2. Another point raised by the counsel for the defendant was, whether his subscription was binding, in consequence of its having been made upon a subscription book, in the hands of an agent, sent into towns on the line of the proposed railroad east of the city of Middletown for the purpose of obtaining additional subscriptions to enable the company to complete and extend the road, and not upon the regular subscription book, opened for the purpose of receiving subscriptions to the stock by the persons authorized to open subscription books on giving such notice of the times and places when and where they were to be opened, as they, or a majority of them, might deem reasonable. As this proceeding took place after the organization of the corporation, it of course could not in any way affect the legality of that act; and we are therefore not *577called upon to consider that question, or whether the defendant, as a party to the irregularity, could take advantage of it, had the first organization been upon subscriptions thus obtained. The defendant not only made the subscription which has been referred to, but he acted as a stockholder, and as such accepted the office of director to which he was appointed by the company. We therefore think he ought now to be deemed to have waived all objection to the form of his subscription, if indeed there ever was any ground of objection to it. A question almost identical with this arose in the late case of the Danbury & Norwalk Railroad Company v. Wilson, 22 Conn., 435, and the court held that the conduct of a subscriber whose subscription had been obtained in the mode which was here adopted, and who had taken part in a meeting of stockholders, and been chosen a director, precluded him, as between himself and the corporation, in an action for the recovery of installments assessed upon his stock, from disputing the regularity of the organization as a corporation.
3. We perceive no objection to the charge in respect to the meetings of the directors at which the calls for installments were made. The records of these meetings showed a quorum to have been present, and the meetings we think should be presumed to have been legally warned or notified unless the contrary was shown. Sargent v. Webster, 13 Met., 497.
4. The original charter required four directors to be present at a directors’ meeting, to constitute a quorum for the transaction of business. But thei’e was a union of a company chartered by the legislature of Rhode Island with the Connecticut company, under authority from the legislatures of the two states, the new or united company taking the name of the company chartered by this state, and the defendants claimed that after the union, as the Rhode Island charter made no provision as to the number of directors that should constitute a quorum, it became immediately subject to the general rule of law, requiring for that purpose a majority of the directors to be present. But by the agreement of the two companies, which was sanctioned and confirmed by an act of the legislature of Rhode Island, the Woonsocket Railroad Company *578was .to “ surrender its franchises, powers' and privileges to the New York and Boston Railroad Company, and become united •therewith.” Under such a union it seems quite obvious that all the provisions of the Connecticut charter continued in force ; and there is nothing to show that the legislature of Connecticut ever assented to any alteration in this respect. This is clearly so, unless there is a repugnancy between the charters which does not admit of being reconciled. But there is no such repugnancy. The Rhode Island charter makes no provision on the subject. We do not see then why the united company, having all the chartered powers and privileges of both, does not retain this provision of the Connecticut charter, after the union as well as before. Especially does this seem to be so, since the legislature of Connecticut expressly preserved to the united company all the powers, rights, privileges and franchises which had been and might thereafter be granted to the original company in this state. And the new company was also made subject to all the provisions of the original charter. 4 Private Laws, 1010. We think therefore that the 'court was right in not sustaining this claim.
5. There was appended to Mr. Brainerd’s original subscription the words “ to be expended between the Connecticut river and the east line of the state,” which words, it is claimed, constitute a condition precedent, which has never been performed. And as the corporation has become so hopelessly insolvent that there is no probability that it can be performed, it is insisted that he is absolved from any liability which he might otherwise be under to pay his subscription. The court however instructed the jury, that this was not a condition which prevented Mr. Brainerd from becoming a stockholder. Perhaps it may be true that these words might be used in such a sense as to bear the construction claimed for them, but if so, they are, as we think, equally liable to be construed as words of direction or request;. that is, as the expression of a desire on the part of the subscriber to the stock, that the amount of his subscription should be expended east of Connecticut river. Considering then that the object of the company was to obtain *579additional stockholders^ and that he subscribed to a book that purported to make him a stockholder, that he must have known this, and supposed that by this subscription he did become a stockholder, as otherwise he never could have assented to act as a stockholder, and on the strength of this as a subscription to the stock have accepted the office of director, to which he was chosen clearly upon the idea that he was in fact a stockholder, we are inclined to think that he never intended by these words to annex a condition, on the performance of which alone by the company he intended to become a stockholder. This is the only construction at all consistent with the conduct and acts of the parties at the time and immediately thereafter ; and as they are the words of Mr. Brainerd himself, in a document which he signed apparently with intent to become a stockholder, it is- hardly credible that he intended by them to render his subscription nugatory. Besides, if it be admitted that these words constitute a condition, it is a condition for his benefit, which he might waive ; and his accepting the office of director and acting as such would be waiver of it. See Danbury & Norwalk R. R. Co. v. Wilson, supra. It appears to us therefore that there was no error in the ruling of the court on this point.
7. There was another point made, though not very much pressed, in reference to the rejection of the testimony of the original defendant, on another trial in a former suit between him and a Mr. Bishop. The defendant having died since the commencement of the suit, and the defense having devolved upon his executors, who have been made parties, they attempted to obtain the benefit of his testimony by showing what he testified on the former trial. As that was a trial between different parties, having different rights, and with whom the plaintiff had no privity, and as he had no opportunity to- examine or cross-examine the witnesses, it would be contrary to the first principles of justice to bind or in any way affect his interests by the evidence given on that occasion, however identical the questions or some of them may have been with the questions which arise in this case.
*580We do not advise a new trial on any of the grounds on which it is sought.
In this opinion the other judges concurred.