Court Opinion

ID: 4927770
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:59:13.505054+00
Date Added: 2024-06-11T08:13:28.026653
License: Public Domain

The opinion of the Court was drawn up by
Shepley J.
This case is presented for consideration on a motion to set aside the verdict and grant a new trial, on the ground, that it is against the weight of the evidence.
*41The counsel for the corporation, which is principally represented by Edward Little, do not contend, that the organization of the corporation on the 29th day of March, 1838, with the act of incorporation, was not sufficient to prove the existence of the corporation from that date, as it respects all persons, who had not consented, that its first existence should be considered as commencing on the fourth day of June, following. They contend, however, that the plaintiffs did so consent, and cannot therefore be permitted to assert, that it had an earlier existence for the purpose of establishing claims against it, especially after a new stockholder had purchased under the expectation held out by the records, that it had not an earlier existence. If they could be charged with aiding in a double organization with an intention to conceal prior debts or liabilities of the corporation, or to hold out, in any manner, falso appearances to a subsequent purchaser of the stock, they would not be allowed to set up any prior claims against it.
The testimony authorized the jury to conclude, that the corporation assumed the payment of the note to the Granite Bank given for money borrowed before the act of incorporation to carry on the business, which the corporation received and conducted after the 29th day of March. And that the plaintiffs paid the principal portion of that note. And that they purchased and paid for two horses for its benefit. In doing this, there is nothing to show, that they did not conduct fairly, and thereby obtain a just and legal claim against the corporation. After they had made the payments, and before the fourth of June, they might, for ought that appears, have brought a suit for it, and have recovered against the corporation. In what manner have they forfeited that right? They consented to regard the first organization as illegal, to organize anew, to permit the stock to be divided anew, to take new shares, and to act under the now organization for the future. They did not profess to surrender or to release any claims. And it does not appear, that they were aware their rights would be affected by considering the organization of the corporation as commencing on the fourth of June. Jf not fully proved, it might fairly be *42inferred from the testimony, that they assented to the new organization under a misapprehension of law, and not from a desire to hold out false appearances, or from any other improper motive. And in doing so, they only acted as three among many members of the corporate body; and cannot therefore be legally held accountable for the acts of the corporation in making up records, which held out false appearances respecting the time of its first existence. They do not appear to have been present, or to have made any statements respecting the debts due from the corporation, when Mr. Little purchased. The effect of those proceedings and of the records may have been to induce him to conclude, when he purchased, that no debts did or could exist against the corporation before the fourth of June. But if all parties acted fairly and under a misapprehension of their legal effect, the law must decide upon their rights without regard to the party, who may prove to be the sufferer. The testimony shews, that it must have been a matter of notoriety, that a line of stage coaches had been running upon that route for two months before the fourth of June, and that the business had been managed by persons pretending to be an agent and directors of a corporation. This would seem to be sufficient to put a purchaser on his guard to inquire, whether there had not been debts contracted, and how far there might be a corporation existing and responsible for them.
Under such circumstances it is not perceived, that there is any just cause to complain, that the jury came to the conclusion, that the plaintiffs did not intend to surrender, discharge, or affect, any of their claims against the corporation by consenting to a new organization of it.

Judgment on the verdict.