Opinion of the Court, by SEDGWICK, Ch. J.

for the shares, is indispensable to a subscriber being an owner of shares in capital stock" whatever may be said of a case where no fact is present as the foundation of an inference that title has passed, except the bare fact of a subscription, it is entirely reasonable that where, in addition, the corporation has explicitly recognized the alleged stockholder as such, and the latter has acted in that capacity, such facts should be deemed sufficient to justify a conclusion of ownership and make the subscriber a stockholder." In the present case, the facts justified the inference made by the judge below, that the persons who claimed in the assent to be the owners of the 40 shares, were, in fact, stockholders and owners of capital stock to that amount.

It is not necessary to determine that the 120 shares were or were not legally issued. They were issued to the other stockholders without any consideration received by the corporation. Whether they were legally issued or not, the result in this case would be the same. The findings show that the judge below acted upon this view.

The plaintiff further complains of the issuing of bonds of the company to the defendants, or some of them, upon the consideration of the payment to the company of 75 per cent. of the face of the bonds. The transaction in itself is not invalid. If the obligation were given by a natural person, there might be a valid objection that they were void for usury. A corporation cannot avoid its obligations for such a reason.

Assuming, however, that such of the defendants as were trustees of the company when they took the bonds from the company, held such a relation to the company that the company could avoid the transaction, that right to avoid was an equitable right. The transaction was not void, and might be ratified. And if the stockholders ratified, expressly

Dissenting Opinion by INGRAHAM, J.

or by acquiescence, after knowledge for a sufficient. time, the plaintiff cannot avoid. The finding below, that there was such a ratification or acquiescence by all the stockholders, was supported by direct and circumstantial evidence.

The case does not disclose any error, and the judgment should be affirmed with costs.

FREEDMAN, J., concurred.

INGRAHAM, J. (dissenting).--I am unable to concur with my associates. The plaintiff was authorized by statute to execute a mortgage upon its property to secure existing debts. It has been held that when a bond of a corporation is issued, it is a debt, and that a mortgage to secure such a bond is valid, but the bond as between the obligor and the obligee, where such obligee is one of the trustees of the corporation, is only an obligation for the amount paid thereon. When, therefore, the corporation issued to its trustees bonds for which they paid seventy-five cents on the dollar, the obligee could only have recovered from the plaintiff the amount that he had advanced to the company, and the bond was a valid debt of the company to that extent only. The mortgage was valid to secure the payment of the valid debt, but was not valid to secure what never was a debt of the company.

I do not think that the evidence justified the court in finding that all the stockholders ratified the acts of the trustees in giving to themselves obligations of the company at seventy-five cents on the dollar. There was no formal act of ratification. At most it was a failure of the stockholders to take the bonds at that price when offered to them, and subsequently, after the transaction was completed, a failure to take proceedings in disaffirmance thereof. But the corporation was under the control of the

Statement of the Case.

same trustees who had authorized the issue of the bonds, and it does not appear that it was able to repay to the trustees to whom the bonds had been issued the amount that they had actually paid to the corporation. I think the stockholders had a right to wait until the obligations became due or the obligees attempted to enforce the obligation, and then tender the amount actually due. The delay of the stockholders has not changed the posi tion of the parties, and there is nothing to show that either the corporation or its stockholders are estopped from asserting that the corporation is only liable to repay what it had actually received.

It is clear that Ellis purchased the bonds for himself, paid for them with his own money, and took them in the name of Julia E. Ellis. It is not necessary to determine whether there can be any relief as against these bonds issued to Ellis in this action without making Julia E. Ellis a party.

I think that plaintiff was entitled to a judgment declaring that the bonds issued to its trustees, and now held by them, are valid only to the extent of seventy-five per cent. and allowing it to discharge such obligation on a payment of that amount and interest.

I think, therefore, the judgment should be reversed and a new trial ordered.

LUCIEN B. TERRY, ET AL., RESPONDENTS, v. HENRY BANGE, APPELLANT.

Receiver appointed in supplementary proceedings—Jurisdictional facts should appear from the order or the papers on which it was granted-Motion for removal of receiver.

The order that the motion below sought to set aside was made in 1862. The principal ground for its vacation was that it did not appear on the face of the order that the judge granting the same had jurisdiction in the premises.

Appellant's points.

That it did not recite the existence of facts necessary to jurisdiction. The moving papers did not set out the whole of the record of the supplementary proceedings on which the order was made. The order alone was set out, but, in some portion of the moving and opposing papers, it did appear that the necessary jurisdictional facts existed at the time of the entry of the order, and that the whole of the record at the time disclosed that the necessary facts existed and were proper. The power of the judge was derived from Section 298 of the Code.

Held, that the judge having power and jurisdiction to appoint a receiver, all other directions given in the order as to bond and matters of a like kind, were to be reviewed if they were erroneous by appeal, or, if matters of irregularity, by motion. The appellant has been unsuccessful in his attacks upon the order by appeals, and the irregularity as to the bond has been cured by the order now appealed from, which should be affirmed. Held, also, that it is not a substantial objection to the order that "The N. Y. Superior Court" was named instead of the correct name, The Superior Court of the city and county of New York." The words used sufficiently identified the court.

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By the Code of Procedure, notice to the judgment creditor was not a condition precedent to the exercise of the power to appoint a receiver. If it be assumed that the receiver is not a resident of the state, and for that reason should be removed, there should be no removal without the same be accompanied by a substitution of a qualified receiver in his place.

Before SEDGWICK, Ch. J., TRUAX and DUGRO, JJ.

Decided March 4, 1890.

Appeal from an order denying defendant's motion to set aside an order appointing a receiver in supplementary proceedings.

H. M. Whitehead, attorney and of counsel, for appellant, argued:

The order appointing the receiver is void upon its face for the following reasons: (1.) It is not entitled in an action in any court known to the law. There is no "N. Y. Superior Court." It may be inferred that the Superior court of the city of New York was the court in which the action was pending, but an order appointing a receiver is a muniment of title and authority for action, and should upon its face exhibit the necessary evidence that the person had

Appellant's points.

The

been appointed a receiver of the property of the judgment debtor in proceedings supplementary to execution by a judge or court authorized by law to make such order. (2.) The order does not recite facts necessary to show that Samuel Garrison, as Kings county judge, had authority to make it. county judge in making an order for the examination of a judgment debtor and for a receiver in an action in the Superior Court of the city of New York is acting under a special statute with no general power as judge and must strictly follow the statute. Wibber v. Hobbie, 13 Hun, 382. All else is without jurisdiction. Bangs v. Selden, 13 Hun, 374.

In supplementary proceedings before a county judge on a judgment in another court, nothing is to be presumed in favor of his jurisdiction. The facts upon which it rests must be shown affirmatively by the recitals in the order. People v. Huilbert, 5 Hun, 446. Jurisdiction would be presumed in favor of a court of general jurisdiction without any recitals. Bangs v. Dunkelfeld, 18 N. Y. 592. But the authority of an inferior court to act must appear on the face of its proceedings. Chemung National Bank v. Judson, 8 N. Y. 260. The production of an order made by a court or judge authorized by law to make it, in proceedings supplementary to execution, reciting the facts necessary to give the court or judge authority to act in the proceedings, furnishes conclusive evidence of regularity when attacked collaterally and prima facie evidence when assailed directly. Potter v. Merchants' Bk., 28 N. Y. 652; Wright v. Nostrand, 94 Ib. 45. In 1862 it was necessary among other things to confer jurisdiction or authority to make an order appointing a receiver in supplementary proceedings: 1st.-That the person of whose property a receiver was appointed should be a judgment debtor. 2d. That execution should have been returned unsatisfied by the sheriff