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Christensen v. Quintard

8 N.Y.S. 400 Court N.Y. Gen. Term Decision date 1890-01-10 English

Delivered by Daniels, J.

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p. 400
Christensen v. Quintard et al.
(Supreme Court, General Term, First Department.
January 10, 1890.)

Headnote

Corporations—Gift of Stock—Liability of Stockholders. ’
Inasmuch as the liability of a shareholder to pay for stock does not arise out of the relation, but depends on his contract with the corporation, express or implied, or on some statute fixing his liability, in the absence of either contract or statute, one to whom shares have been issued as a gratuity does not, by accepting them, commit any wrong on creditors, or make himself liable to pay the face value of the shares, as in case of a subscription. Following 12 $T. E. Rep. 648.
Appeal from special term, New York county.
Action by Christian T Christensen against Edward A. Quintard and the Illinois & St. Louis Bridge Company, to recover an amount unpaid on shares of stock held by Quintard in said bridge company, and for the value of certain bonds issued by the bridge company and held by Quintard. There was a judgment for plaintiff, and defendant Quintard appealed.
Argued before Daniels and Barrett, JJ.
Hamilton Odell, for appellant. Tracy, Olmstead & Tracy, for respondent.

The plaintiff is a judgment creditor "of a corporation created under the laws of the United States, and of the state of Illinois and the state of Missouri, and known as the St. Louis Bridge Company. This judgment was recovered in July, 1882, and an execution issued upon it against the properly of the judgment debtor,' which was afterwards returned wholly unsatisfied. The defendant was the owner of 25 shares of the capital stock of the bridge company, and also of a quantity of its second mortgage bonds, amounting to the sum of $6,875. The bridge company issued the stock as being paid up to the amount of $40 a share, but no part of this sum of money had been paid upon either of the shares. The company called in the other 60 per cent, upon the shares, and—apparently as an .inducement for the shareholders to pay the amount—resolved to distribute among them $1,000,000 in amount of its second mortgage bonds. No" other consideration was given for the bonds received by the defendant than the payment of this 60 per cent, upon the shares. But these'bonds, as well as the $40 a share upon the stock, were substantially a donation or gift by the bridge company to the defendant. And the plaintiff, as a judgment creditor, prosecuted this action against him for the recovery of the amount unpaid upon the shares, and also for the value of the bonds received by him. The case, after a preceding trial, was before this general term, when it was held that the plaintiff, upon these facts, was entitled to maintain this action, ( 36 Hun, 334 ;) and upon this decision the case seems to have been tried when it resulted in the judgment from which the appeal has been brought. And by this judgment it was held that the plaintiff was entitled to recover the amount unpaid upon the shares,'with interest, together with the value of the bonds, and interese thereon. The defendant has excepted to the conclusions of fact and law, so far as they comprehend the question of his liability; and whether that has been legally maintained by the judgment is the only point now required to be determined for the disposition of the case.

p. 401
Since the decision made by the general term in this action, another action, by the same plaintiff, against Eno, another stockholder in the bridge company, has, under similar circumstances, been heard and decided. That case was finally taken to the court of appeals, where it was held that the plaintiff was not entitled upon these facts to maintain the action, (Christensen v. Eno, 106 N. Y. 97 , 12 N. E. Rep. 648 ;) and the same conclusion was reached in the still later case of Christensen v. Bridge Co., 5 N. Y. Supp. 925 . These-decisions are decisive of the present action; for no substantial distinction exists between the facts as they are presented by this case and those appearing in the two cases last referred to. It has been urged on behalf of the respondent that the legal point upon which the liability has been made to turn was not presented in the present action as it was in the case decided by the court of appeals. But this seems to be a misapprehension, for the exceptions which were taken by the defendant to the conclusions of fact and law are equally as-effectual for the presentation of the point as the motion to dismiss the complaint was in that case. As the facts have now been proved, the action is incapable of being maintained for the reason assigned upon these other occasions, that the bridge company had no demand or right of action whatever arising out of the facts against the defendant for the payment of the additional 40 per cent, on the shares, or for the value of the bonds themselves, and. the defendant had received nothing upon either from the company. The-judgment should therefore be reversed, with costs.

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