Court Opinion

ID: 3602427
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:48:32.577983+00
Date Added: 2024-06-11T13:57:19.733859
License: Public Domain

In June, 1852, John Edgerton, who is represented by the plaintiff in this action, subscribed for *Page 426 
twenty shares of the capital stock in the defendant's company, and paid ten per cent at the time, and agreed to pay the balance when called for by the defendant's directors. In the month of May, 1853, the directors of the defendant called for the payment of a further ten per cent on the first of September next following, and thereafter ten per cent every sixty days until the whole amount subscribed for was fully paid. Edgerton paid the second installment of $200 on the 20th of April, 1855, and the third, fourth and fifth, amounting in the aggregate to $600, on the 1st day of May, 1860. Edgerton declining to make any further payments, the defendant, on the 12th of December, 1860, commenced an action against him for the balance upon his subscription, being in the aggregate the sum of $1,000. In that action Edgerton interposed the defence of the statute of limitations, and on that issue succeeded as to every installment but the tenth, and for that $200, interest and costs, judgment was rendered against him. This left $800 due upon his subscription, unless it was paid by the judgment in the action referred to, upon the successful plea of the statute of limitations. Edgerton having apparently fallen into some pecuniary disaster, the plaintiff, as receiver, became vested with all his legal and equitable interests, and he now appeals to a court of equity for a certificate of twenty shares of the capital stock of the defendant's company, when, in fact, at least $800 and interest remains unpaid, and is to be regarded paid, if at all, only by a fiction of the law. If the law shall determine that the judgment relied upon has paid the debt, so that the plaintiff is entitled to the same equitable remedies as if he had in fact paid the amount due, it must be so adjudged, and he must be awarded his remedy.
In my judgment, the claim of the plaintiff is not supported by any principle that should give it any consideration in either a court of law or equity. The statute of limitations never paid a debt, although it barred a remedy. (Dean v. Hewit, 5 Wend., 257; Pinkerton v. Bailey, 8 id., 600; Soulden v. VanRensselaer, 9 id., 293; Sands v. Gelston, 15 J.R., *Page 427 
511; Bell v. Morrison, 1 Peters, 351; Carshore v. Huyck,
6 Barb., 583.) The moral obligation to pay always remains, although the remedy cannot be enforced in the courts. This moral obligation was always a good consideration for a subsequent promise to pay. (Vide cases supra; also Ehle v. Judson,
24 Wend., 97; Scouton v. Eislord, 7 J.R., 36; Shippey v.Henderson, 14 id., 178; Ingersoll v. Rhodes, Hill  D. Supp., 371.) Some distinction has been suggested, mainly upon the question of pleading, between a debt barred by the statute of limitations and the obligations of a debtor discharged under the insolvent laws; but it is, I think, nowhere held that a debt is paid because the remedy of the party to enforce it is suspended or gone. At all events, it is not too much to say that a party who claims to have paid a debt by a successful plea of the statute of limitations, and seeks an affirmative remedy on the ground of such a fortunate venture, is not to be regarded as the especial favorite of a court of equity.
I am not able to discover any difference in the effect to be given to the allegation that a remedy has been barred by the statute of limitations, whether it is proved by parol evidence or established by the record of a judgment. In either case the fact is precisely the same, and the mode of proof does not appear to be material. The judgment could only be the more effective if it extinguished the debt or the moral obligation to pay; but by the law of this State it does not have that effect. This statute, it may be suggested, can be used as a shield, but not as an aggressive weapon, and is entirely like the statute giving the presumption of payment in respect to a sealed obligation after twenty years. It is available as a bar to an action, but ineffectual where a party seeks affirmative relief, based upon the fact of payment. Where such relief is sought, payment in fact must be shown. An insolvent's discharge or a successful defence of the statute of limitations will not answer. These principles will be found approved in many adjudged cases. (Waltermire v.Westover, 14 N.Y. 16; Morey v. Trust Co., id., 302; *Page 428 Lawrence v. Ball, id., 477; Carshore v. Huyck, 6 Barb., 583, and cases cited.)
Whether the stock subscribed for by Edgerton was legally forfeited to the use of the company may present another and different question, which will have to be disposed of when, if ever, it shall arise. If Edgerton or his receiver shall ever pay or offer to pay the $800 actually due, with interest, and the company should refuse to issue the stock demanded, it may be that other questions will have to be determined. It has been suggested that the plaintiff should be awarded a certificate for twelve shares of stock, for which payment in fact has been made, and that the judgment of the Special Term might be modified to meet this suggestion. But this cannot be done, as no such question in any form was before the court below. The plaintiff put himself upon the hazard of obtaining eight shares of stock, for which he had in fact not paid and did not propose to pay any money. He never offered to take a certificate for twelve shares, and if he had, we do not propose to consider whether the company would have been bound to issue it. It claimed the power to forfeit the right of the plaintiff to any stock for the failure to pay the balance of his subscription, and attempted to exercise that authority; and the legal effect of that effort we do not consider. It is sufficient for the present that we find satisfactory reasons for affirming the order of the General Term and ordering judgment absolute against the plaintiff, with costs.
All concur.
Order affirmed, and judgment accordingly.