Hacker v. National Oil Refining Co.

The opinion of the court was delivered, May 17th 1873, by

Williams, J.

There was no error in rejecting the offer of evidence set out in the bill of exception embraced in the first specification. It was an offer to prove in substance a contemporaneous parol agreement at variance with the written contract, without any allegation or offer to show that the note was given or obtained by fraud or mistake. It is too well settled to admit of doubt that such evidence is inadmissible: Anspach v. Bast, 2 P. F. Smith 356. It did not tend to prove that the consideration for which the note was given had failed. There was no offer to show that the company had no stock which it was authorized to issue or sell, and it was not bound to transfer the stock on its books, or to deliver a certificate therefor to the defendant until the payment of the note. Nor was there error in rejecting the offer embraced in the second specification. If the evidence was offered for the purpose of contradicting the testimony of Henry C. Stevenson, the secretary of the company, it was rightly rejected, for it was not competent for the defendant to contradict the testimony of her own witness. If it was offered as a declaration or admission binding the company, it was inadmissible, because it was not within the scope of his authority, or in the course of his business as secretary of the company; and it was not offered to be shown that he had express authority to make the declaration.

The next specification presents the question, whether the company was authorized under its charter to take a promissory note for the stock subscribed by the defendant, and whether a recovery Can be had thereon in this action ? The company was organized under the Act of 18th of July 1863, Pamph. L. 1864, p. 1102, the 16th section of which provides “that every company may, from time to time, at a legal meeting called for the purpose, assess upon each share*of stock, such sums of money as the company may think proper, not exceeding in the whole the amount at which each share was originally limited; and such sums assessed shall be paid to the treasurer at such times and in such instalments as the company directs; no note or obligation given by a stockholder, whether secured by pledge or otherwise, shall be considered as payment of any part of the capital stock.” It is strenuously contended that under the latter provision of this section, the company had no authority to take the note in payment of the defendant’s subscription. But the clause does not in terms forbid the corporation from taking a note or obligation from a stockholder. On the contrary, it impliedly admits the right, but declares that no such note or obligation, however secured, shall be considered as payment of any part of its capital stock; and the reason is found in the next section, which authorizes the sale of the stock for nonpayment of the assessments for the space of thirty days after the time appointed for payment. It is obvious that if a note given for the assessments was to be considered as payment, the authority of sale could not be exercised. The cases of the Hibernia Turnpike Road Co. v. Henderson, 8 S. & R. 219, and Leighty v. The Susquehanna and Waterford Turnpike Co., 14 Id. 434, have no application to the subscription in this case. In each of these cases the subscription was made to the commissioners prior to the organization of the company, under acts of incorporation requiring the payment of a specific sum on each share subscribed at the time of making the subscription.

In one case the subscriber paid nothing, and in the other gave a note for the amount required to be paid, and the subscriptions were held to be void, and the company not entitled to recover thereon. And why ? For the simple reason that the giving of a note was not payment of money within the meaning of the act, and a subscription without such payment conferred no rights on the subscriber, and therefore, neither the commissioners iior the future company would enforce payment by action.

But here the defendant’s subscription was made to the company after it was organized, under an express authority given by the act, to increase its capital stock; and therefore, as ruled in The Erie and Waterford Plank Road Company v. Brown, 1 Casey 156, and The Philadelphia & West Chester Railroad Company v. Hickman, 4 Id. 318, it had authority to accept subscriptions on such terms, as to time and mode of payment, as might in the exercise of a sound discretion be regarded for the best interests pf the company. Nor was the note without consideration. It was given for the stock subscribed by the defendant, and though it was, not transferred on the company’s books, nor a certificate therefor delivered to the defendant at the time the note was given, she was entitled to demand and receive the stock on payment of the note. The contract was mutually obligatory. The defendant was bound to pay the note when it became due, and the company was bound to transfer and deliver to her the stock for which she subscribed: and the evidence shows that before bringing suit the company tendered her a certificate for the stock.

Judgment afiirmed.