Court Opinion

ID: 5439160
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:59:01.574125+00
Date Added: 2024-06-11T08:31:56.965491
License: Public Domain

The corporation had no power to transfer the stock named in the order; nor had Baldwin, as. President, or otherwise, power to bind the company by any such order, or to impose upon the corporation the necessity of keeping his private accounts, as required by the order. The plaintiff has misconceived his action. Baldwin, if -any one, is liable to him. (Taft. v. Brewster, 9 Johns. 333; to the same effect, Stone v. Wood, 7 Cowen, 452 ; Hills v. Bannister, 8 Cowen, 32; White v. Skinner, 13 Johns. 307.) The President of a corporation is not ex officio the agent ■of the corporation to sell property; and unless appointed by the agent to sell, his representations are not binding on the corporation. (Grump v. U. S. Mining Go. 7 Garatt, 352.) The company, by common consent of all parties originally interested, rightfully issued all the original shares of the capital stock to E. J. Baldwin, trustee, (not President) who held a personal lien upon each of said shares for its proportion of the original cost of the mine, necessary expenses, interest, etc. The company, in law, had a discretion and a right to determine to whom the original shares should be issued, and if any shares were issued wrongfully, the parties injured should have pursued the stock. The corporation having issued all the shares of capital stock, were powerless to issue any more. The plaintiff’s remedy—if any he had—was clearly against Baldwin, or else to have pursued the stock. The case of the Mechanics' Bank v. New York and New Haven B. B. Go. 13 1ST. Y. (3 Kirwan) 600 et seq. is decisive of both the first and second. The stock was rightfully issued to Baldwin as trustee, and therefore there was no conversion by the corporation. The plaintiff must pursue the stock.
*309T. L. M. CMpley, for the Respondent.
If the company had a right to issue its stock to Baldwin, it must be responsible to parties injured by it without their consent. And if all the stock of the company had been issued, then it should have cancelled twenty-five hundred shares of the interest of plaintiff, which had been issued to Baldwin, and reissue the same to plaintiff. The President and Secretary undoubtedly had authority to do this, and as they refused to do so, the company is reponsible, as it would have been had they not given them authority to do so, because the law gives them that authority, and the corporation by incorporating under the law renders itself amenable to it.
By the Court :
1. The agreement “ by the parties in interest ” that the plaintiff should be entitled to two thousand five hundred shares of the stock of the company was not the agreement of the corporation sued as defendant here, for the corporation at that time had no existence.
2. It does not appear that the plaintiff had the legal title to the stock mentioned in the complaint.
3. It does not appear that the corporation converted the stock in controversy. The order of Baldwin, as “ President of the corporation,” drawn upon himself as “ President of the corporation,” followed by a refusal upon his part and upon that of the Secretary to deliver the stock, would not amount to a conversion of the stock by the corporation.
Judgment and order denying a new trial reversed, and cause remanded.