Hawley v. Upton - 102 U.S. 314 (1880)
U.S. Supreme Court
Hawley v. Upton, 102 U.S. 314 (1880)
Hawley v. Upton
102 U.S. 314
A., by his bond, acknowledged the receipt from an insurance company of ten shares of its capital stock, and agreed to pay $200 therefor, in installments -- one-fourth on the receipt of the stock certificate, and the remainder in three equal amounts at three, six, and nine months from Jan. 7, 1871, the date of the bond. He paid on executing it $25, and his name was entered as a stockholder on the books of the company. The certificate was not delivered or demanded. In 1872, the company became bankrupt. Held that the assignee is entitled to recover of A. the unpaid installments.
This is an action brought July 25, 1873, by Clark W. Upton, assignee in bankruptcy of the Great Western Insurance Company of Chicago, Ill., to recover from Theodore Hawley the unpaid installments alleged to be due on his contract to subscribe to the capital stock of that company.
The court, the case having been submitted to it upon the pleadings and proofs without the intervention of a jury, found the following facts:
"The plaintiff is assignee in bankruptcy, as alleged in the petition."
"On the second day of January, 1871, Rossitur, agent of the Great Western Insurance Company, requested the defendant to take stock in said company."
"The defendant, on certain representations by Rossitur, signed the following paper or bond:"
"No.___] THE GREAT WESTERN INSURANCE COMPANY [$200"
"Capital stock $500,000, with liberty to increase to $5,000,000"
"Organized July 20, 1857, under act of legislature approved March 4, 1857"
" Know all men by these presents that for and in consideration of ten shares of the capital stock of the Great Western Insurance Company of Chicago, Ills., received by me, I am held and firmly bound, and agree to pay the Great Western Insurance Company of Chicago the sum of two hundred dollars in installments, as follows:
twenty-five percent thereof upon receipt of stock certificate, twenty-five percent in three months from date hereof, twenty-five percent six months from date hereof, twenty-five percent nine months from date, with interest ten percent after due."
" CHICAGO, 7th Jan'y, 1871."
" THEO. HAWLEY [SEAL]"
" Signed and delivered in presence of ________ "
"At the time the said bond or paper was issued to Hawley, the latter paid Rossitur twenty-five dollars, and delivered to him the bond. It was not delivered on any particular conditions. It was delivered to an agent of the company's, namely the said Rossitur."
"The company afterwards came into possession of the bond, and entered Hawley's name on their books as a stockholder, and published him in their publications as one of their stockholders, Hawley having no knowledge of the publications. Hawley paid no other money, and no calls were made upon him prior to the bankruptcy."
"No certificate of stock was ever sent or delivered to Hawley, and he made no demand on the company for any certificate of stock."
"The bankruptcy of the insurance company was caused by fire in October, 1871."
"The defendant signed no subscription paper or any other paper than the bond above set out."
"On the foregoing facts and the pleadings judgment was rendered for the plaintiff. The judges were opposed in opinion on the following questions:"
"1st, whether the delivery of a stock certificate under the above circumstances was necessary to constitute the relation of stockholder between the defendant and the insurance company."
"2d, whether the above facts constitute a defense to the action."
"The judges being divided in opinion on the above questions, hereby certify such division to the supreme court pursuant to the statute in such case made and provided. "