Hammond v. Haskell

Action on Note — Consideration — Agreement for Surrender of Plaintiff’s Stock to Corporation—Delivery to President Joint Maker.—Where a note sued upon was executed by the president of a corporation and other stockholders interested therein, in consideration of an agreement that the plaintiff should surrender to the corporation the stock held by him therein, which did not specify how or in what manner the stock should be surrendered to the corporation, the plaintiff properly delivered the shares to the president of the company with whom and other defendants advancing the consideration therefor the agreement was made.

Id.—Delivery of Shares to Makers for Company — Knowledge of Performance—Absence of Objection to Mode — Waiver.—When the shares of stock were delivered, indorsed to appellants as joint makers, to one of them as president, they knew that such delivery was in performance of plaintiff’s agreement to surrender the stock to the company. If they objected to the mode of performance, they should have stated such objections, thus enabling plaintiff to obviate-the .same; otherwise, the objections must be deemed to have been waived.

Id.—Words of Nonacceptance Indorsed on Certificate—Absence of Objection to Mode of Surrender—Letter Returning Certificate. Words indorsed on the certificate of stock, “Not accepted, no consideration,” cannot be regarded as an objection to the mode or manner in which plaintiff offered to surrender the stock to the corporation. Neither is there anything in the letter returning such certificate to plaintiff showing that appellants objected either to the manner or time of surrender of the stock. .

Id.—Redelivery of Shares—Retention Without Objection—Objection in Answer—Estoppel.—When plaintiff, shortly after return of the certificate, again delivered the shares of stock to appellants, who made no objection to the mode of performance, but by their silence led plaintiff to believe that such renewed act was accepted as full and complete performance, they were estopped to object to performance m their answer, where no damage from nonperformance is claimed therein.

Id.—Validity of Agreement to Transfer Shares to Corporation— Construction in Eavor of Purchase for Stockholders.—While the validity of the agreement construed as a contract involving the sale and transfer to the corporation of its own shares of stock is not argued or presented, yet, conceding that such construction would render the contract invalid, nevertheless the contract is susceptible of the construction that under its terms the defendants were making a purchase upon their own account and directing the delivery to the corporation for their benefit.

Ib.—Contract Capable of Two Constructions—Validity Preferred. Where a contract is susceptible of two constructions, one making it valid and the other void, the first ought to be preferred.