Court Opinion

ID: 7191574
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:57:40.793352+00
Date Added: 2024-06-11T16:16:12.154437
License: Public Domain

On Rehearing.
Manning, C. J.
Whenever aiiy increase of the capital of the defendant Company was authorized, notice of sixty days must be given, within which time, stockholders had the privilege of taking additional shares, proportioned to the amount of their stock. Any shares, not taken at the expiration of that time, might be disposed of by the directors for the benefit of the association.
The increase of the capital stock was authorized August 5,1873, and notice was given of it. The time, within which the stockholders had the privilege of taking additional shares, expired on October 4th. A few days before that date, the Directors by resolution extended the time thirty days, i. o. to November 3d.
During this period of ninety days, the plaintiff neither took, subscribed, nor indicated a willingness, desire, or intention to take or subscribe the additional stock.
On Nov. 3d,, the directors again extended the time to the 15th. of that month. On the 14th., the plaintiff went to the office of the Company, and verbally notified its President that she claimed her privilege of taking the additional shares of stock, and that she would he prepared to pay for them in two or three days. She was told that payment in two or three clays would not answer — that the last extension of time expired on the morrow, and unless payment was made within that time, she could not have the additional stock. She made no payment, and tendered none then. On the 22d of that month she made a formal tender of the money, necessary to pay for her shares.
I think she was too late, and I use the singular pronoun, because the change of my opinion changes our decree. I do not base this upon any supposed or real identity of meaning of the words, ‘ take ’ and ‘ subscribe to ’, when used in reference to such a matter as this, nor upon the idea that either of' these words means, or is synonymous with, ‘pay for.’ Neither do T attach any importance to the use by the Secretary of *769terms, different from those appearing in the resolution of the Board of Directors. He could no.t change the action of the Board by adopting:' phraseology, not authorized by it.
Throwing aside verbal criticism, and inquiring solely what the patties must have understood by the articles of association, by the resolutions of the Board providing for an increase of stock, and for the time- and manner in which the privilege of taking additional stock should he: exercised, we think the attempt of the plaintiff to avail herself of this-privilege was properly frustrated.
Why should the Directory have extended the time beyond the sixty-days for taking or subscribing for the stock, if it was only designed th give parties an. additional thirty days to say whether they would take itW Why should parties need additional time to say whether they wanted additional stock, if saying was the only thing to be done. The stock had become valuable. The original subscribers had carefully guarded their, right to additional stoék, proportioned to their original subscriptions, if’ an increase should ever bo authorized. It was secured to them as a privilege. Each one would presumably desire to avail himself of this-privilege, but every one might not be prepared to pay for the stock at once. The sixty days was given, and must have been given, not as a •period of deliberation for each one to determine whether he would avail himself of this privilege, but as a period of preparation so that he could avail himself of it.
So too of the extension of thirty days beyond the time first accorded, and then, in order to afford another and last opportunity, a further extension of fifteen days was granted' — evidently for the purpose of enabling parties to do something else, and something more, than merely declaring that they would take the stock, and pay for it when the condition of their finances permitted. It required no delay, and no extension beyond the sixty days fixed by the articles as the time of notice, to enable parties to say that.
It was not until the last day of the last extension that the plaintiff verbally notified the Company of her intention to take the additional stock, and when expressly informed then that she must pay within the time of the last and third extension, made no effort to comply with that just requirement. It was not until seven days after the expiration of the last extension that a formal tender was made o.f the money. Her rights were then lost. Therefore
It is ordered and adjudged that our former decree is annulled and set aside, and that the judgment of the lower court is affirmed with costs.
Spencer, J. I dissent for the reasons stated in the original opinion.
Marr, J. I adhere to the opinion rendered in former hearing.
*770Egan, J.
I adhere to the views of this case presented in the dissenting opinion prepared by me when the case was first before us. That opinion was, however, prepared without having the record before me at the time, and I was thus led into a possible error of fact which does not affect the principles of the opinion, but which, while it strengthens the view of the case I then took, I still prefer to notice. I refer to the fact that instead of the terms of subscription being certainly as they would ordinarily be in law, cash, in the absence of mention of a time being given for payment, subscribers for the now stock were required to pay eight por cent interest after the expiration of the sixty days given by the terms of the charter. This either means, and I still entertain that view, cash, with the addition of interest calculated from that time to the time of taking the stock, or, at most, a credit of sixty days.more upon condition of paying eight per cent interest on the amount. Either view would exclude all right in the plaintiff, who had assumed no obligation capable of being enfofced in law to pay the eight per cent conventional interest of which nothing but written evidence is receivable under our law, C. C. art. 2924, and who therefore had no conveying right to the stock.
I concur in the decree against the plaintiffs’ rights and in favor of defendants.