Detroit Driving Club v. Fitzgerald

67 N.W. 899, 109 Mich. 670, 1896 Mich. LEXIS 921
Michigan Supreme Court·Decided June 30, 1896·Published·Cited by 8 cases

Opinion

Moore, J.

The plaintiff was organized under Act No. 22, Pub. Acts 1883, and sued defendant to recover an unpaid subscription of stock. By direction of the court, the jury rendered a verdict in favor of the plaintiff. Defendant assigns error.

In July, 1893, D. J. Campau, after some talk with defendant, presented him with a paper reading as follows:

“ Whereas, it is proposed to organize a Corporation for the purpose of promoting good fellowship among its members, by providing a clubhouse and pleasure grounds for their entertainment, where at all times they may meet for social intercourse, and further to encourage, by providing the proper facilities, raising, improving, breeding, training horses, at meetings to be held at stated times in each year: Now, therefore, we, the undersigned, for the purpose of such organization, do hereby severally subscribe the sum set opposite ourS respective names, to its capital stock, and agree to pay the same to said corporation, in installments, as called for from time to time by the board of directors.”

The paper bore the signatures of 20 persons at $1,000 each, and one at $$,500. Mr. Fitzgerald signed for $2,-500. Mr. Campau claims that at this time he informed Mr. Fitzgerald that they had organized the Detroit Driving Club; that the corporation expected to have a capital stock of $150,000; that $68,000 was then subscribed; and that they were going ahead to acquire the grounds and buildings, and would not wait for the full subscription. Mr. Fitzgerald denied that he was told by Mr. Campau they were going ahead before .the capital stock was all subscribed. The club afterwards bought grounds, [672] put up buildings, and spent a large sum of money. August 9, 1893, an assessment of 20 per cent, was made on all subscriptions to the capital stock. December 5, 1893, a further assessment of 80 per cent, was made; and the president was directed to let contracts for buildings, and to proceed with the work necessary to hold a race meeting,—the cost not to exceed $100,000. After the 20 per cent, assessment was made, Mr. Fitzgerald did not pay it on his subscription, and, in a conversation with Mr. Campau, said his money was tied up, and had some talk with him to the effect that he had subscribed for more stock than he could take care of, and a little later wrote a letter reading as follows:

“Detroit, Michigan, August 31, 1893. “D. J. Campau, Esq.,
“City.
“Dear Sir: I rather overreached myself when I subscribed for $2,500 of stock in the D. D., signed in this stringency. I was speaking to Mr. Vail today, and he thought I might reduce my subscription to $1,500, and then, after a while, when money is cheaper, subscribe for more stock, if I desire, and somebody else did not want it. If my subscription can be changed to the above amount, and' you will advise me of the same, I will send you a check at once for $300.
“William: H. Fitzgerald.”

Mr. Campau replied as follows:

“Dear Sir: In answer to your letter of recent date, in regard to reducing your stock subscription in the Detroit Driving Club to $1,500, would say, if you will send your check for $300, being 20 per cent, assessment made on the stock, I will see that the other 10 shares are placed elsewhere,
“Yours truly,
“D. J. Campau.”

Mr. Fitzgerald sent his check for $300, and a certificate was issued certifying that he had “subscribed for 15 shares of the capital stock of the Detroit Driving Club, at $100 per share, amounting to $1,500, for which certificates of stock will be issued upon the payment of [673] the amount subscribed, and the surrender of this certificate. The assessments paid are indorsed hereon,”—and indorsed with the $300 payment.

Article 3 of the plaintiff’s articles of association reads as follows:

“The purpose or purposes of this corporation is to promote social intercourse amongst the members; to provide for them the convenience of a clubhouse, pleasure grQunds, and proper facilities for improving, training, and exhibiting horses at meetings to be held at stated times in each year. The- term of existence of this corporation is fixed at 30 years from the date hereof. ”

Among the by-laws adopted by the association were the following:

“ Every member of the club shall pay an initiation fee of $50, excepting subscribers for $500 ■ or more of the original capital stock of the corporation. All such subscribers, who take and pay for the stock thus subscribed for, will be exempt from the initiation fee for membership, so long as they continue to own and hold not less than $500 of said original capital stock in said corporation. A transfer or sale of any amount of said stock will not entitle the person to whom said stock be transferred or sold to membership. Stockholders will not be exempt from payment of annual dues.
“The annual dues shall be $25, payable in advance the first day of January. Members admitted after August 1st in any year shall pay $10 for the remainder of the current year.
“At all racing meetings, members and guests shalL wear their badges, so that the same may be readily seen by the officers of the club. Members shall be required, •on racing days, to exhibit their badges to the gate keeper at the club entrance, upon entering the club grounds. In case a member shall neglect to bring his badge with him, he may once, hut not oftener, during a racing meeting, obtain at the club entrance the temporary use of a badge; such badge to be returned the day following to the secretary, at the city office. No badge can be obtained at the public entrance to the racing grounds. Members without badges, entering at the public gates, must pay the regular entrance fee.”

[674] July 2, 1894, the secretary of the club wrote Mr. Fitzgerald as follows:

“Dear Sir: Assuming that you desire membership in the club, I inclose bill for dues for 1894, and member’s equipment of tickets. Should you not care to become a member this year, you will return the tickets on or before July 10th.”

To‘which, under date of July 7th, Mr. Fitzgerald replied :

“I herewith return tickets sent me July 2d. I do not desire membership under your by-laws.”

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Detroit Driving Club v. Fitzgerald, 67 N.W. 899, 109 Mich. 670, 1896 Mich. LEXIS 921 (Mich. 1896).

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