her. The testator died in January, 1887, and Alonzo was duly appointed, and is acting, as the executor of his will.

The foregoing facts are not disputed by the defendant, and are substantially found by the court at special term. Upon them the question is presented whether the plaintiff does not own, and have absolute title to, the bond and mortgage so purchased by the testator, and which stands upon the record as assigned to her. The defendant contends that such bond and mortgage was never given from the testator to this plaintiff, for the reason that the necessary elements to constitute a gift are wanting; that there was neither a delivery by the testator, nor an acceptance by the plaintiff. He conceded that the causing it to be assigned to her personally, and directing that such assignment be put on record, would be a sufficient delivery, if it had been done with the intent to vest her with the absolute ownership; but when it appears that the father's intent was that she should have such an interest only as was given her by the trust contained in his will, and that his purpose in having it so assigned and recorded was but to provide for carrying out that trust, he claims such acts do not amount to a delivery, and that no absolute gift can be predicated upon them. It may be conceded that upon such a state of facts a gift could not be established, and if we consider only the transaction as it occurred prior to October 13, 1883, it may be that the facts established thereby would not warrant the conclusion that a gift or absolute delivery was intended. But, when we take in connection therewith the transaction attending the receipt of that date, a very clear purpose to vest her with the absolute ownership of such bond and mortgage becomes apparent. By its very terms, it appears that the testator had then made up his mind to substitute a present gift of $2,000 for the legacy which he had given her in the will. Evidently, the trust by the will created was to be no longer operative. That plan was abandoned, and the bounty which she was to receive from her father was given her directly, instead of through the medium of his will. Whatever she then received, she took in lieu of "the legacy and bequest," and such receipt in the hands of his executor was, by its terms, a complete bar to any claim she might make that the trust be executed for her benefit. 1 Pom. Eq. Jur. § 564; Hine v. Hine, 39 Barb. 507; Langdon v. Astor's Ex'rs, 16 N. Y. 33. Such being the case, it certainly ought to be considered strong proof that the $2,000 therein referred to had been delivered to and accepted by her as her own property, absolutely. I gather from the case that there is no serious dispute but that the $2,000 referred to in the receipt is the bond and mortgage in question. At least, all the facts in the case point that way, and on the evidence it should be so assumed. clusion is therefore irresistible that whatever may have been his intentions at the time he took the assignment, and had it recorded, he, at the time he took this receipt, agreed with her that henceforth the bond and mortgage then standing in her name on the record should be deemed absolutely hers, and the receipt given V.25N.Y.s.no.1-2

The con

by her should be used as proof that the legacy and trust created for her in the will were satisfied. No meaning or intelligent purpose can be given for his taking such receipt, other than that, and no evidence was given on the trial tending to give a different explanation. Such an arrangement has in itself all the elements necessary to constitute a valid gift. The thing given being at that time in the absolute control and at the disposal of the donee, the donor recognizes and affirms her control and ownership of it by taking the receipt from her, whereby she surrenders her interest under his will for the property she thus acquires. Such an arrangement amounts to a delivery by him, and an acceptance by her. It is true he might have given the papers over into her pos session, and such an act would have been a further evidence of his transfer to her. But the assignment and its record as effectually vested her with the legal title to the mortgage, and deprived him of all control over it, as if he had placed the papers in her hands. His plain recognition of her absolute ownership over it declares his intent as to the effect of recording it as effectually as if he had put the papers into her custody. The donee was given the absolute and full title and control of the bond and mortgage, and nothing more was necessary to complete a valid gift. In re Crawford, 113 N. Y. 560, 21 N. E. Rep. 692.

Considerable stress is laid by the defendant upon the fact that the testator, after the recording of the assignment, told the plaintiff that she would not have the mortgage unless she had children. It does not appear when this statement was made. I judge from the evidence that it was before the receipt of October 13, 1883, was taken. If it was before, it has no bearing whatever against the conclusion that a change of purpose was had, and the gift was made in exchange for the receipt. An analysis of the other evidence in the case is not needed. None of it is inconsistent with the view above taken, and much of it tends to sustain it, particularly the fact that the defendant procured a discharge of the lien of the legacy upon his farm from the plaintiff, upon the theory that such legacy had been satisfied and redeemed by the testator in his lifetime. It is sufficient to say that it appears from the written evidence in the case that such satisfaction of the legacy was made, and that the trust under which he claims to hold this mortgage no longer exists. On the whole evidence, there can be no doubt but that this bond and mortgage was the fund with which the legacy was to be satisfied, and therefore the title and ownership thereof at the time of the testator's death was in this plaintiff. The judgment of the special term was therefore erroneous, and should be reversed. Judgment reversed on the law and dered, with costs to abide the event.

facts, and a new trial orAll concur.

(71 Hun, 371.)

POWERS v. KNAPP.

(Supreme Court, General Term, Fourth Department. September 23, 1893.) 1. CORPORATIONS-STOCKHOLDERS' LIABILITY TO CREDITORS.

Where defendant signed, with the other incorporators, the original certificate for the organization of a corporation, and also an instrument whereby he agreed to take 30 shares of the capital stock, and pay therefor $100 per share, "when said company is duly organized, and we are called upon for such payment by the trustees of such company," he became a stockholder of the corporation, on its organization, and individually liable to its creditors to the amount of his unpaid subscription, under Laws 1848, c. 40, § 10, though he signed the papers only to make the requisite number of persons to effect an organization, and it was agreed between the incorporators that he should pay nothing on the stock, nor have any interest in the concern, and should assign his stock to other members as soon as the organization should be perfected. 2. SAME-TRANSFER OF STOCK.

As Laws 1848, c. 40, § 25, provides that a book shall be kept by the officers of a corporation, containing the names of the stockholders, and that a transfer of stock shall not be valid unless entered on such book, an assignment of stock which is not so recorded does not relieve the assignor from the operation of section 10, making stockholders individually liable to creditors of the corporation to the amount of their unpaid subscription.

Appeal from circuit court.

Action by Isaac P. Powers against Hiram Knapp. Defendant had judgment, on the verdict of the jury, dismissing the complaint, from which, and an order denying a motion for a new trial on the minutes, plaintiff appeals. Reversed.

The action was brought against defendant as a stockholder of the Winslow & Knapp Lumber Company, organized under Laws 1848, c. 40. Section 10 of that act, and on which the action is based, provides: "All the stockholders of every company incorporated under this act, shall be severally individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of stock held by them respectively for all debts and contracts made by such company, until the whole amount of capital stock fixed and limited by such company shall have been paid in," etc. Argued before HARDIN, P. J., and MERWIN and PARKER, JJ. Hannibal Smith, for appellant.

Watson M. Rogers, for respondent.

PARKER, J. In December, 1889, the defendant signed, with Egbert W. Knapp, Norris Winslow, and two others, the original certificate of organization of the "Winslow & Knapp Lumber Company," in which it was stated that he was one of the trustees of such corporation. At the same time he signed with the same parties an agreement whereby he agreed to take 30 shares of the capital stock of the Winslow & Knapp Lumber Company, and pay therefor the sum of $100 per share, "when said company is duly organized, and we are called upon for such payment by the trustees of said company." On the trial of this action, he testified that he understood the paper was for the purpose of organizing a company, but

that he signed it simply to assist the others, who supposed that five persons were necessary to effect the organization, and under the agreement with them that he should put nothing into the company, and take nothing out of it; that it was agreed between himself, Egbert Knapp, and Winslow that he was to have no interest in the concern, and that as soon as they became incorporated he was to assign back to them anything that was supposed to be his. The certificate was duly filed, and the company entered upon the transaction of its business. Under date of March 11, 1890, two stock certificates, of 15 shares each, were filled out upon the book of the corporation, by its secretary, to this defendant, and on the 25th of March they were detached from their stubs in such book, and laid upon a table in its office; and the defendant was called in, and requested by Egbert Knapp and Norris Winslow to execute the assignment in blank which was printed on the back of such certificates. The defendant did so, and immediately left the office, leaving the certificate upon the table. Egbert W. Knapp and Norris Winslow thereupon each took one of such certificates, and retained it as his own property. The defendant never paid anything to the company for any stock, nor did he ever ask for any issue of stock to himself, nor was he ever called upon by the company to pay for any, nor was any ever issued to him, except as above stated, and he did not receive anything for executing the assignment on the back of said certificates. No entry of such transfer, in the manner required by the twenty-fifth section of the act, was ever made upon the books of the company. Subsequently, and on October 27, 1890, the defendant attended a meeting of the trustees, and signed a written consent that the company mortgage its property, in which it was stated that he was the owner of 30 shares of the company's stock. Such was the only meeting of the trustees that he ever attended. In March, 1891, the defendant also signed, with others, and swore to, a petition for the voluntary dissolution of the company, in which it was stated that he was one of the trustees, and the owner of 30 shares of its capital stock, which had been paid for in full. Upon such petition the company was subsequently dissolved by order of court, and a receiver of its property appointed. The defendant testified that he knew resolutions were passed at the meeting of the trustees authorizing a mortgage, but had no recollection of signing the consent. As to the petition, he knew it was an application to dissolve the company, but had no further knowledge of its contents. That he signed the papers because he was requested to do so by Egbert W. Knapp. There was also evidence tending to show that the defendant was a laboring man, ignorant of such business, in the employment of Knapp & Winslow, and easily influenced by them. The plaintiff's debt was for money loaned the company, and accrued on October 29, 1890. The whole of the capital stock of the company had not been paid in, nor had the certificate required by section 10 of the act of 1848 ever been filed and recorded. Upon these facts the plaintiff claimed at the trial that the court should hold, as matter of law, that the defendant was a

stockholder of the company, to the extent of 30 shares of its stock. The court declined to so hold, and left it to the jury, as a question of fact. The jury found that the defendant was never a stockholder of the company. Such ruling and such finding are claimed to be errors upon this appeal.

The relation of stockholder to a corporation depends entirely upon contract, and, to establish it, it must appear that the minds of the parties met; that the defendant agreed to become a stock holder in the corporation, with the privileges and responsibilities of such relation; and that the corporation accepted him as such. Glenn v. Garth, 133 N. Y. 31, 30 N. E. Rep. 649, 31 N. E. Rep. 344; Mor. Corp. (2d Ed.) §§ 24, 46. Section 10, c. 40, of the Laws of 1948, under which this action is brought, imposes its liabilities only against the stockholders of a corporation; and the plaintiff is therefore required, in order to maintain his action, to establish the fact that the defendant was a stockholder of the corporation at the time his debt was contracted. This he could only do, within the authorities above cited, by showing that such a contract, either express or by implication, had at some time been made between the defendant and the corporation. If the only evidence of such a contract was to be found in the fact that the defendant had signed the original certificate of organization, had acted as a trustee of the company, had indorsed over the two certificates of stock made out to him, and had frequently declared himself to be a stockholder, I should say that nevertheless it was a question of fact whether, under all the circumstances, and in the light of his explanations, he had ever actually made a contract with the company, by which he had agreed to become the owner of any of its shares of stock. But when we take into consideration the agreement signed by him and the other corporators, whereby he agreed to take and pay for 30 shares of such stock, a very serious question is presented,-whether the written and conceded evidence does not contain all the elements of the needed contract. The subscription to take the 30 shares, alone by itself, would not constitute a contract with the company. Dorris v. Sweeney, 64 Barb. 636; Railroad Co. v. Curtis, 80 N. Y. 219. But it has been held by a general term of this court, in Dorris v. French, 4 Hun, 292, that when such an agreement is consummated, by signing the certificate of organization. it becomes one transaction, and is equivalent to subscribing formal articles of association, and the agreement may be enforced by the company itself. So, in Warehousing Co. v. Badger, 67 N. Y. 294, the defendant subscribed the certificate of organization, and placed opposite his name the number of shares taken by him; and it was held that such was a binding subscription for stock, and made him a stockholder in the company. The statute does not require that the number of shares taken by a subscriber should be stated in the certificate, nor does it require that any subscription for stock should have been made at all before filing such certificate. Mor. Corp. § 33. Therefore, if a statement made in such certificate is a sufficient contract with the company, it would seem that a