Schorestene v. Iselin — 53 N.Y. St. Rep. 347

Majority

p. 347

Henri Schorestene, Pl’ff, v. Adrian Iselin, Def’t.

(Supreme Court, General Term, First Department,

Filed May 12, 1893.)

Headnote

'Contract—Reorganization of railroad under foreclosure.

Defendant advertised that, having purchased at foreclosure sale a certain railroad, he had organized a new company, and would exchange one share of the new stock for every four shares of the old with such stockholders of the old company as should, before a certain date, deposit their certificates of stock, with transfer and power of attorney, with a certain trust company. Plaintiff never saw the offer, but hearing of it, his brother presented to the trust company a certificate of stock, which was in the name of a third person, indorsed by such person with a transfer and power in blank. The certificate was rejected, and from that time nothing was done by the plaintiff or his brother until some time after the time fixed for making the exchange had expired, when plaintiff sought to avail himself of •the offer, and, tailing, brought suit for breach of contract, without accounting for his ladies. Held, that no contract existed between the parties, as plaintiff had failed to accept the terms and comply with the conditions of the offer.

Motion for a new trial upon exceptions directed to be heard in the first instance at general term.

Livingston & Olcott (J. Van Vechten Olcott, of counsel), for pl’ff; Miller, Peckham & Dixon (Wheeler H. Peckham, of counsel), for def’t.

On a trial, at the close of plaintiff’s case, the ■complaint was dismissed, and certain exceptions of the plaintiff ■ordered to be heard in the first instance at the general term. Plaintiff sued for a breach of contract that he alleges was made between him and defendant. Defendant, on October 31, 1885, advertised an offer in the following language:

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“ To the Stockholders of the Rochester & Pittsburg Railroad Company: At the recent foreclosure sale I purchased the property of the Rochester & Pittsburg Railroad Company, covered by its second mortgage. I have organized two companies, one in New York and one in Pennsylvania, and they are about to be consolidated. To such stockholders of the Rochester & Pittsburg Railroad Company as shall, on or before the 20th day of November,, 1885, deposit their certificates of stock, with transfer and power of attorney to transfer on the books signed in blank, with the-Union Trust Company of New York, 1 will, upon the organization of such consolidated company, give one share of the common stock of such consolidated company for every four shares of the: stock of said Rochester & Pittsburg Railroad Company so deposited. Said trust company will give its receipt for stock so deposited as being deposited pursuant to this offer, and to be delivered to me, on receipt from me, for the depositor, of one share of such common stock of such new consolidated company for every four shares of Rochester & Pittsburg Railroad Company stock so deposited. In case if the stock of such consolidated company is-not ready for delivery within forty days after the organization thereof, said depositors to have the right to withdraw the stock so deposited by them. The stock of such consolidated company will be six millions of dollars preferred six per cent, non-cumulative stock, and six millions of dollars common stock. This offer is limited strictly to the stock deposited on or before the 20th November, 1885. The Union Trust Company will be prepared to receive deposits of stock on or after Nov. 6.

“ Oct. 31,1885. Adrian Iselin.’’

Defendant, on December 14, 1885, advertised a further offer in the following language:

“ New York, December 14, 1885.

“ To the Stockholders of the Rochester & Pittsburg Railroad Company: A considerable number of Rochester & Pittsburg

stockholders having stated that they had not seen my circular on the 31st October, and have not, therefore, deposited their stock in accordance with its conditions, I have decided to give all outstanding stockholders another opportunity to deposit their stock with the Union Trust Company, and receive therefor receipts entitling them to one share of-stock of the consolidated reorganized company for every four shares deposited by them. This offer is-limited strictly to the stock deposited on or before the 31st December, 1885.

[Signed.] “Adrian Iselin.”

The plaintiff, as shown by the testimony, never saw either of these notices until after December 31, 1885, but as the result of information received, either by himself personally, or by his brother from a broker, the brother, prior to December 31, 1885, took a certificate of stock for 100 shares, which was in the name of one James Champ, and upon the back of which was indorsed a transfer and power in blank purporting to be signed by James Champ.

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to the office of the defendant, and was there referred to the trust -company. What then occurred at the trust company is thus detailed by the plaintiff’s brother:

“ I at once went, in accordance with this direction, to the office of the Union Trust Company, and presented the same certificate to a clerk or employe at a window, made the same request, saying that I had been directed there by the office of Adrian Iselin to make the exchange in question. I handed the certificate through the window to this clerk, who took it, looked at it, went off witli it to some other part of the office, and returned in a few minutes, and pushed the certificate back to me through the window with the response that it was no good. To the best of my remembrance the words, 1 This is no good,’ were the words employed. I asked him to explain why, but he gave no intelligible explanation, to the best of my remembrance merely stating that he had nothing to say about it; it was no good. I thereupon took said certificate, -came back to our office, and locked it up again in the safe.”

This visit to the trust company he fixes as some time between the 10th and 20th of December, 1885, and from that time nothing was done by either the plaintiff or his brother until 1886, when, through the intervention of a friend, and by letters directed personally to the defendant, the plaintiff sought to avail himself of the terms of the offer, and his efforts having failed, this suit was ■commenced. The plaintiff’s theory is that the offer presented by the published notices made a con tract between the parties, and that for a breach thereof the defendant was liable in damages. Upon the theory, however, that the offer of the defendant, and a strict compliance therewith by any stockholder, would constitute .a contract, which is doubtful, we fail, upon the testimony, to find evidence that the plaintiff complied with the terms of such offer. The offer was to give one share of the new stock for four shares of the old to such stockholders as should, before the date fixed in the notice, deposit their certificates of stock, with transfer and power of attorney, with the Union Trust Company of New York, for which the latter was to issue its receipts. The plaintiff failed to make the deposit within the time fixed, and the only justification for laches in this regard was his brother’s inability to apprehend the objection of the trust company to receiving the certificate without some proof of the genuineness of the signature of Champ -on the back of it. This objection of the trust company was capable of being intelligently communicated, and could then have been obviated by having the certificate transferred on the books of the -company in plaintiff’s own name, indorsing the same in blank, and depositing it with the trust company. Instead, however, of doing this, or in fact of doing anything, the plaintiff allowed the time to go by, and, upon the theory that the defendant in some way was responsible for the action of the trust company, brought this suit to recover damages upon an express agreement From the reference already made to the testimony, we think that the error in this contention is manifest, for, whatever grievance the plaintiff may have as against the trust company, we fail to see how the defendant is to be held respon

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si ble therefor. The defendant’s offer was to exchange the stock of the reorganized company for such stock as was deposited by holders, and for which they were to receive the receipts of the trust company. In the very nature of things it would have been impossible for the defendant to ascertain how many stockholders had deposited their stock, or what amount of stock had been deposited, except from evidence furnished by the trustee; and, while it is true that to some extent the trust company became the agent of the defendant, this, upon the facts here appearing, did not subject the defendant to liability in favor of the plaintiff. Undoubtedly, had the offer been complied with, and the stock deposited with the trust company, the latter, and perhaps the stockholders themselves, would have an action against the defendant. But where, as here, the stock was never deposited, and the omission so to deposit was due to the plaintiff’s misapprehension of the exact terms of the offer and a failure to comply therewith, no contract was entered into between the parties, and no resultant action for damages would follow.

There are subsidiary questions presented by plaintiff’s exceptions ; but in view of the conclusion we have reached with respect to the main question, as to whether a contract arose out of the offer made by the defendant and the subsequent conduct of the plaintiff, these need not be noticed. We think that the plaintiff could not acquire any right, either against the trust company or the defendant, unless by a precise acceptance of the offer within the time limited, and his failure tó accept the terms and comply with the conditions of the offer, whether this was the result of misapprehension, inadvertence, or neglect on his part, did not result in the meeting of the minds of the parties upon a definite proposition, did not result in the making of a contract between them, and gave no right to an action for damages to the plaintiff' upon the theory of a breach of an express contract. We think, therefore, that the exceptions should be overruled, and that judgment should be ordered upon the dismissal of the complaint in the court below, with costs and disbursements in the court below and upon this application.

Yan Brunt, P. J., andFoLLETT, J., concur.