Court Opinion

ID: 7976800
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:00:45.970383+00
Date Added: 2024-06-11T16:34:55.668074
License: Public Domain

Brown, C. J.
(dissenting,,.
I am unable to concur in the decision rendered in this case. .There. *212are two possible theories upon, which plaintiff might prevail, neither of which in my opinion is tenable under the facts presented in the record: (1) Upon the theory that the promissory note is an en-forcible obligation, notwithstanding the fact that the consideration therefor, the stock of the corporation, has never been issued or tendered to defendant, and cannot now be issued, the corporation being in the hands of a trustee in bankruptcy; and (2) under the doctrine of estoppel in the interests of creditors. It seems clear to me that plaintiff cannot, on the record before us, prevail upon either ground.
1. The note was given for a certificate of stock in the corporation. No certificate of stock was ever issued or tendered to defendant, and the record is wholly silent upon the question when it was to be issued. Defendant testified that he agreed with an agent of the corporation to purchase the stock if the company would give him a year in which to make payment. The agent granted the time, and the execution of the note followed. Nothing being said or agreed upon as to when the stock should be issued, the presumption necessarily arises that .it was to be issued when the note became due and was paid. In this ¡situation the payment and issue of the stock were dependent and •concurrent acts. Defendant could not insist upon a delivery of the ¡stock without payment of the note, nor could the corporation insist upon payment without issuing and tendering the stock. St. Paul, S. & T. P. R. Co. v. Robbins, 23 Minn. 439; Walter A. Wood Harvester Co. v. Jefferson, 51 Minn. 456, 59 N. W. 532. The case •comes within the general rule that in all contracts to be performed in the future in which the acts of the parties in performance are dependent and concurrent, neither can seek affirmative relief without first tendering performance on his part. 38 Cyc. 132, and authorities there cited. That this contract was executory, and to be completed when the note was paid and stock issued seems quite clear. The corporation, through the trustee, is seeking affirmative relief without tendering performance, and this under the rule stated cannot be done. The plaintiff trustee in bankruptcy is in no better position than the corporation would have been had it brought the action. Defendant asks no affirmative relief; he pleads defensive *213mátters only. It was not incumbent upon him to demand the stock in order to render his defense available. Affirmative action looking, to the completion of the contract rested upon the corporation, for it. could not insist upon payment without tendering the stock. Plaintiff must therefore fail on this theory of the case. The Robbins and Jefferson cases above cited are in harmony with the rule laid down by text writers and almost universally followed by the courts. 3 Notes to Minn. Cases, 1164; note by Judge Freeman in 93 Am. St. 352 and 386.
2. Nor can recovery be had upon the doctrine of estoppel. The action is brought by the trustee in bankruptcy of the defunct corporation, and in the interests of creditors of the concern. The record presents no case of estoppel. It is wholly silent upon the question whether the defendant was ever recorded in the books of the corporation as a stockholder or a subscriber for stock. Nor does it appear that defendant ever in any way participated in the affairs of the company, or that the creditors dealt with the company in reliance upon his supposed, connection therewith. Defendant by the transaction of purchase did not at that time become a stockholder as a matter of law. The contract being executory no rights or liabilities arose until the note was paid or the stock issued. St. Paul, S. & T. F. R. Co. v. Robbins, and Walter A. Wood Harvester Co. v. Jefferson, supra. The corporation was a going concern at the time of the transaction and the rules of law applicable to subscription contracts, made to aid in the formation of the corporation, do not apply. 93 Am. St. 352 and 386.