Court Opinion

ID: 7191573
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:57:40.79168+00
Date Added: 2024-06-11T16:16:12.152420
License: Public Domain

Dissenting Opinion.
Egan, J.
In my opinion, the original stockholders who desired to subscribe for additional stock under the resolution of the board, stood, so far as the mode or manner of subscription is concerned, on precisely the same footing as any other person proposing or desiring to subscribé, the only difference in their favor being that original stockholders had an absolute right to subscribe to shares of the new stock in proportion to that already held by them within a certain time, and that other persons had not that absolute right, but, however desirous to subscribe, might have been denied the privilege of doing so by the officers of the corporation at any time that they might have chosen to withdraw the stock from sale, or indeed not to offer it at ah.
If what was done and said by the plaintiff amounted to a subscription on her part, the same or similar acts and declarations on the part of another who had never been a stockholder, would have had the same legal effect so far as relates to the more manner of making a subscription. In other words, if the stock was offered for sale generally to all persons, it would have required nothing* more on their part to make a good and binding contract than was required of plaintiff, to whom, and to others in like situation, it was offered within the sixty days. This proposition will hardly be questioned, and can not be successfully denied. Nothing which would not constitute a valid contract or obliga*765tion on the part oí another, could constitute one as to the plaintiff. The mere expression of her willingness or desire to take stock, or to make a further subscription, even if unaccompanied by any conditions, can not be considered as amounting to a subscription in any proper or legal sense of the term. That Mrs. Hart so understood at the time, is manifest from her asking further time to raise the money, that she might make her subscription, or take stock, after the time fixed by the charter, and the resolution of the board of directors. That such was the view taken by both parties at the time is evident, both by her application for the extension of time, and the refusal of the president to grant it.
Indeed, by her own showing, Mi’s. Hart was without power to take the stock at the time, and had to await the action of a family meeting, and the order of the judge to enable her to do so. Even the power to subscribe was not conferred till after the expiration of the time within which the right was to be exercised. There was ample time to obtain this authority sooner, and within the sixty days. If it was not done, it was certainly not through the fault or neglect of the defendant. Sap-' pose it had never been obtained at all, and that from decline in value of stock, or for some other reason, Mrs. Haft had stopped short in her efforts to obtain the advice of the family meeting, and order of the judge, or that they had refused to give it, could the subscription have been enforced by the company ? To this there can be but one answer— that it could not.
It is conceded by plaintiff’s counsel, indeed by both éounsel, that no specific mode of taking this new stock was prescribed, and that no custom or usage of this or of similar corporations has been shown in evidence. In the absence of either, we are remitted to the general principles of the law of obligations to interpret the acts and language of the parties to this alleged contract, and their legal effect — as was said in the case of the Vicksburg, Shreveport, and Texas R. R. Co. vs. the Parish of Ouachita, reported in 11 A. 649. “ Giving full weight ” to the acts and language of the plaintiff, Mrs. Hart, “ they can not be considered as constituting per se a subscription to the capital stock ” of the defendant. It was at most only a proposition to contract, and upon terms different from those fixed in the charter, and the resolution of the board; but, in my opinion, it did not amount to so much, but only to an expression of. desire to subscribe.
Redfield, on the Law of Railways — vol. 1, p. 128, sec. 37, par. 1, fourth edition — says: “ The obligation resting upon the vendor of railway stock is to have, at the time specified in the contract for delivery, a good title to the requisite number of shares, and to manifest his readiness to convey;” and .in par. 2 of same section: "The corresponding *766obligations' upon the vendee are, readiness to receive the proper conveyance (for which read stock) at the specified time and place, and to pay the price; ” and, in note 4 of p. 131, cites Green vs. Murray, 6 Jur. 728, to the effect that “ if stock is to be delivered on demand, it is necessary to show an actual request to deliver, in order to sustain an action for nondelivery.” It may be conceded that a perfectly valid subscription may be made without payment at the time, provided any other mode of subscription is provided for or practiced; and in such case the terms subscription and payment would be by no means synonymous, and the latter might not be a prerequisite to the former. The plaintiffs’ case assumes the obligation on their part to pay the par value of the stock in money. Our own Civil Code provides, article 2050, that “when no time is fixed by the parties for the performance of the obligation, it may be executed immediately, unless from the nature of the act a time either certain or uncertain must be implied. Thus, an obligation to pay money, without any stipulation for time, may be enforced at the will of the obligor.” In this instance no other mode of subscription, or taking of stock, than by paying money for it existed, and the will of the officers, through whom alone the corporation could and did act, was not only made manifest that the price must be at once paid, but, in my opinion, the president had no power to comply with the plaintiff’s request, and grant her further time after the lapse of sixty days. To do so he would have assumed to confer a right upon her upon! terms and at a time different from that fixed in the charter and the resolution of the board. I think the interpretation of that resolution given by the secretary in his advertisement was the proper and legal one, and it is evident that both the president and the plaintiff so thought at the time.
“A proposition does not become an agreement till the party to whom it is made accepts it; and it must be accepted precisely as made.” McDonough vs. Winchester, 1 L. 188. “ The acceptance, to form a contract, must be in all things conformable to the offer; any condition or limitation contained in the acceptance, of that which formed the matter of the offer, gives him who makes the offer the right to withdraw it.” C. C. 1805.
“ The contract consisting of a proposition and the consent to it, the agreement is incomplete until the acceptance of the person to whom it is proposed.” C. C. 1800. “ This assent must be unqualified.” C. C. 1801. “ The will of both parties must unite on the s^me point.” C. C. art. 1798. “ Any modification or change of the proposition is considered as a new offer.” C. C. 1806. “A consent to give any thing else, although of greater value than that contained in the' offer, or to give the same or a larger sum at a different time of payment, does not imply an assent to the offer, and there is, in that case, no obligation:” 'C. C. 1808. “A subscrip*767tion for shares of stock is nothing more than a purchase or sale of stock, ,and the seller is not bound to make a delivery of the thing if the buyer •does not pay the price, and the seller has not granted him any time for -the payment.” C.C. 2487. “In commutation contracts, where the reciprocal obligations are to be performed at the same time, or the one immediately after the other, the party who wishes to put the other in default must at the time and place expressed in or implied by the agreement offer or perform that which, on his part, was to be performed, or the other party will not be legally put in default.” C. C. 1913. “ And though the contract be not commutative, or if commutative, the reciprocal obligations are not to be performed at the same time, yet the party wishing to put the other in default must be himself ready, and must offer to receive performance at the time and place stipulated in the contract, and he can not avail himself of any demand, or offer, at any other time or place,” C. C. 1914. “An offer afterward comes too late.” 19 A. 84; 20 A 505; same 291. “ He must show both his readiness and ability to comply with his own obligation.” 15 A. 675. The case cited from 11 A. of the Railroad Company vs. the Parish of Ouachita was a much stronger one than the plaintiffs’. There the police jury of Ouachita had, in pursuance of an act of the Legislature conferring the power, passed an ordiance which had been submitted to and ratified by the qualified voters providing for a subscription to 6000 shares of the stock of the railroad company, which, by a formal resolution of its directory, had accepted the ordinance as a subscription of stock, and sought to enforce it as such, and yet the court said, considering it as an ordinance legally adopted: “We can not consider its adoption as constituting per se a subscription to the capital stock of the company.” The same principle ■is recognized in1 High’s Ex. Legal Remedies, sec. 390, and p. 275, where it is announced in the text, and several decisions of other States quoted in support of the position, that a mere vote of municipal electors authorizing subscription to a railroad corporation, without the actual subscription by the officers of the corporation, is insufficient, and that mandamus will not lie in aid of the railroad to compel the officers to make subscription. The writer says the mere vote of the people authorizing subscription does not of itself constitute a contract with the railway; nor is it a proposition which can ripen into a contract upon the performance, by the railroad of the conditions annexed to the vote; and “ until the money is actually raised and the stock taken ” it is no contract. If that be so on the one hand, is not the converse of the proposition equally true, and could the railroad company be compelled to issue the stock ? To this there can be but one answer, in the negative. This shows that something more is required to constitute a subscription than a mere expression of willingness or purpose to make it; and it *768would seem that even a mutual consent is insufficient, which was wanting in the caso at bar, as those alone through whom the defendant company could speak gave no consent. I venture the assertion that no subscription or stock was ever before successfully claimed on so slender a basis, and certainly that no such mode of subscribing or taking stock was ever practiced with or by any corporation.
For the foregoing reasons I dissent from the conclusions of a majority of the, court.
DeBlanc, J. T concur in the dissenting opinion of Mr. Justiee Egan.