
    Orr and Orr against Bigelow.
    By a covenant, executed by the parties, the plaintiffs agreed to subscribe for stock in a railroad corporation, and pay ten per cent thereon, and then to assign and transfer the stock to the defendant, who agreed upon such transfer, to execute to the plaintiffs an agreement to pay the residue when duo on the subscription, and to indemnify the plaintiffs against it; and tlic plaintiffs made the subscription and paid the ten per cent. The by-laws of the corporation prescribed that the stock was transferable on the books of the company by the owner, or his attorney, but that no stock should bo transferred on the books until thirty por cent bad been paid thereon, without the consent of the directors. The plaintiffs having applied to the directors for leave to transfer the stock subscribed for to the defendant, which was refused, tendered an instrument to the defendant, whereby they assigned and transferred to him the stock, and constituted him their attorney to transfer it on the books; this he refused, as hot being a compliance, by the plaintiffs, with their covenant. In an action by the plaintiffs, on the covenant to recover damages for its non-fulfilment by the defendant, Held, that the plaintiffs had offered to assign and transfer the stock within the meaning' of the covenant.
    And the plaintiffs having been, after tho defendants’ refusal, compelled to pay to the corporation the balance due on the subscription, Held, that they were entitled to recover this balance and interest, and were not confined to this amount, less the market value of the stock at the time of the refusal, or the trial.
    Actios in the supreme court to recover damages for the non-performance, by the defendant, of the agreement hereinafter set oút. The cause was tried at the Rensselaer county circuit in 1853, before Mr. Justice Parker. The plaintiffs read in evidence a contract, executed by the parties under their respective seals, as follows:
    “Agreement made this eighteenth day of May, 1849 between Thaddeus B. Bigelow, of the city of Troy, of one part, and Alexander and William Orr, who compose the firm of A. & W. Orr, of the same place, of the other part, wituesseth : that the said Orrs do hereby agree to .subscribe for and become responsible to take fifty shares of the capital stock of the Troy and Boston Railroad Company, which will be of the estimated value of five thousand dollars, and for which they will, by their said subscription, become responsible to pay that amount, and agree to pay five hundred dollars on their said subscription for said stock, and after having paid said sum, and on the said Bigelow performing the covenants and conditions hereináfter contained on his part to be performed, assign and transfer to said Bigelow, by a proper instrument of conveyance, all of said stock, or all the interest which they may have acquired in the same, by their said subscription, and the payment of said five hundred dollars. And the said Bigelow, in consideration of one dollar to him paid, and of the covenants herein contained on the part of said Orrs to be performed, for himself, his heirs, executors and-administrators, covenants and agrees to. and with said Orrs, and their heirs and assigns, that he will, after they have paid the five hundred dollars, and upon their executing and delivering to him an assignment or transer of all of said stock, execute and deliver to said Orrs a covenant by which, he will, for himself, his heirs, executors and administrators, covenant and agree with said Orrs, and their heirs and assigns, to pay the remainder of the amount which will be due on their said subscription for said stock, viz.: four thousand five hundred dollars, as the same shall become due and payable, and to indemnify and save them harmless of, from and against all claims, demands, actions, and rights of .actions arising from, or made in consequence of their said subscription, or in consequence of any liability which they may have incurred by becoming stockholders in said company. In witness,” &c.
    It appeared that the plaintiffs, after the execution of the above contract, subscribed for the stock therein mentioned, and paid ten per cent thereon, being $500 ; and that after-wards, and in August, 1853, the plaintiffs signed and tendered to the defendant an instrument under seal, in which it was recited that the plaintiffs had, pursuant to the above contract,, subscribed for the fifty shares of stock and paid the ten per cent thereon, and whereby they assigned and transferred to the defendant the said fifty shares of stock subject to $4500, to be paid thereon by the defendant as called for by the company, and constituted and appointed the defendant their attorney to transfer the stock to himself or his assigns on the transfer books of the railroad company, pursuant to the by-laws. The defendant refused to receive this, on the ground that it was not a compliance, by the plaintiffs, with their covenant to transfer the stock. It appeared that by the by-laws of the railroad company the stock was transferable on the books by a party or his attorney ; but that no stock was transferable on the books until at least'thirty per cent on each share had been paid, unless jy the consent of the board of directors. Before the plaiu-iffs tendered the above mentioned transfer and assignment to the defendant, they applied to the board of directors of the company for liberty to make a transfer of the stock on the books to the defendant, which application was refused. The plaintiffs proved that the railroad company sued them for the amount unpaid on their subscription to the stock, and, in June, 18-51, recovered against them this amount, being $4690.85, which they paid.
    It was proved, on the part of the defendant, that at the time lie refused to accept the above mentioned assignment and transfer of the stock, and at the time of the trial, it was worth from forty to forty-three cents on the dollar.
    The counsel for the defendant insisted: First. That the plaintiffs could not recover, because the contract between the parties contemplated, and the defendant had a right to exact, such a transfer of the stock as would invest the defendant with the legal title thereto, and make him a stockholder in the company; and that the refusal of the board of directors to permit the plaintiffs to make such a transfer did not excuse them; Second. That if the plaintiffs could sustain the action they could only recover the damages they had sustained; and that the recovery should be limited to the amount of the judgment recovered against them by the company, less the value of the stock at the time of the defendant’s refusal, or at the time of the trial. The court overruled these objections, and decided that the plaintiff’s were entitled to recover the amount of the judgment against them in favor of the railroad company, and that on this amount being paid they should transfer the stock to the defendant. The counsel for the defendant excepted. Judgment was entered accordingly, which wTas affirmed at a general term in the third district. The defendant appealed to this court. The cause wTas submitted, on printed points, by
    
      Olin & Geer, for the appellant.
    
      C. Buel, for the respondents.
   Hubbard, J.

By the agreement of the parties, the plain tiffs covenanted to transfer to the defendant all the stock or the interest which they acquired in the same, by their sub scription and the payment of the $500. The first question to be considered is upon the performance of this covenant as a condition of the maintenance of the action. In my opinion, the instrument of assignment tendered by the plain tiffs to the defendant, on the 13th day of August, 1850, was, in the language of the contract, “ a proper instrument of conveyance,” or, in other words, a full compliance with the requirement of the covenant. Its effect was to assign and transfer to the defendant all the interest which the plaintiffs acquired by virtue of their subscription and the payment of the first installment of ten per cent. This was all they undertook to do. They did not undertake to procure a transfer of the stock on the books of the company; their engagement was satisfied when they put the defendant in the position which they themselves occupied towards the company. They subscribed for the stock at the instance of and for the benefit of the defendant, and engaged to surrender all the interest and title under their control to the defendant upon certain conditions. Whether the instrument »f transfer tendered by the plaintiffs would have the effect to vest the legal title to the stock in the. defendant, is not inrportant to inquire. As between the parties, it certainly vested all the right and equitable interest of the plaintiffs, and by the power of attorney contained therein authorized the defendant, upon the payment of the thirty per cent required by the by-law's, to obtain a transfer of the stock on the books of the corporation. (Gilbert v. The Manchester Iron Co., 11 Wend., 627; The Commercial Bank of Buffalo, 22 Wend., 348; Bank of Utica v. Smalley, 2 Cow., 770; 8 id., 398; Grant v. Franklin Ins. Co., 8 Pick., 90; Ang. & Ames on Corp., ch. 16, 445, § 6, 2d ed.)

The plaintiffs performed their covenant to assign as fully and completely as it was in their power to do. It was the duty of the defendant to pay the balance of the thirty per cent, and thus render the stock assignable on the books of the company. It must be presumed that the agreement of the parties was made with express reference to the authority of the directors of the company to make by-laws regulating the transfer of stock (Sess. Laws, ch. 140, §§ 10, 11), and the contract should be construed accordingly. The language of the agreement certainly does not require that the plaintiffs shall, as it respects the corporation, invest the defendant with all the rights and qualities of a stockholder; and no such precedent condition to the right of action should be implied, inasmuch as it involves a necessity, on the part of the plaintiffs, of the payment of the additional twenty per cent required by the by-laws in order to a transfer on the books of the company, which payment the defendant had himself undertaken to make. In my judgment, therefore, the plaintiffs fully performed their covenant, or-tendered a performance which justified this action.

The next question relates to the measure of damages adopted on the trial. That measure was the amount of the judgment obtained against the plaintiffs, by the railroad corporation, on account of the balance of the subscription price for the stock. This rule of damages I think correct, under the agreement of the parties.

The appellant’s counsel, however, insists that the proper measure was the difference between the price and the actual value of the stock at the time of non-acceptance. This is the rule which prevails on the sale and non-delivery or nonacceptance of an article of merchandise or a personal chattel. (9 Cow., 681; 2 Wend., 322; 9 id., 129; 2 Kern., 40.) Although, perhaps, the plaintiffs might, yet they were not bound to adopt such a criterion of recovery, which would; involve their retention of the stock contrary to the plain intent of the agreement.

In making the subscription the plaintiffs acted in behalf of the defendant. The stock was brought into existence for the express benefit of the defendant, and to be assigned to him, after the payment of the first ten per cent, upon a covenant of indemnity against future installments and all liability growing out pf the subscription. The plaintiffs did not stand in the position of a vendor of a chattel, as it respects the measure of damages. They were not vendors of the stock in any just sense. They subscribed, under the contract, rather as agents of the defendant, and as such are not bound to keep the stock and recover the difference in price between the actual value of the stock and the par subscription, after deducting the $500.

The defendant covenanted to accept an assignment of the stock on the conditions specified, and is bound to perform that agreement; and for a breach must respond in damages to the extent of a complete indemnity. This he is required to do by the judgment, which is limited to the amount of the judgment obtained by the railroad company against the plaintiffs.

It follows that the judgment must be affirmed.

Judgment affirmed.  