Hunt v. Sharkey

SHAW, J.

This is an appeal by plaintiff from a judgment of dismissal entered in favor of defendant upon an order granting his motion for nonsuit, and also from an order denying his motion for a new trial.

It appears from the complaint that on February 4, 1908, defendant in writing subscribed for twenty shares of the capital stock of a corporation known as the Duquesne Brewing Company, for which he agreed to pay the sum of one thousand dollars as follows: One hundred dollars on February 4th, and one hundred dollars on the fourth day of each month thereafter until the whole sum was paid. On October 5, 1909, at which time defendant had paid the sum of three hundred dollars on account of his contract, the corporation was, in accordance with the laws of Congress, adjudged a bankrupt by the United States district court. A trustee of the estate of the bankrupt was duly appointed and the referee to whom the matter was referred authorized him to sell at public auction the assets of said bankrupt. Thereupon the trustee proceeded as directed to sell the property of said bankrupt estate, which consisted of certain real estate, promissory notes, and contracts of subscription whereby the subscribers had agreed to purchase and pay for the shares of the capital stock of said corporation, among which was the contract of defendant,

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which was designated as “Parcel 13. E. Sharkey, balance stock subscription, dated February 4, 1908, face amount, $700,” and which contract the trustee, prior to the bringing of the suit, by deed of conveyance, assigned and transferred to plaintiff as the purchaser thereof for the sum of forty dollars. By his answer defendant admits the making of the contract of subscription; admits that only three hundred dollars had been paid thereon, but denies that seven hundred dollars or any sum was due on account thereof.

At the close of plaintiff’s evidence, defendant’s motion for nonsuit, upon the ground that the complaint did not state a cause of action, was granted, followed by judgment of dismissal. Two questions are presented for solution: 1. Whether or not an unpaid balance due upon a subscription for shares of capital stock of a corporation adjudged a bankrupt is, in the absence of a proceeding wherein the equitable liability of the subscriber is fixed, a subject of sale and assignment, collection of which can be enforced by the assignee; and 2. Whether the fact that the complaint failed to state a cause of action was, under the circumstances presented, a ground for granting the motion for a nonsuit.