of the par value of $100 per share, on which he had paid fifty cents per share; that defendant, having control of a majority of the stock of said Company, caused assessments to be levied and threatened by the directors of said Company, for the avowed purpose of building works, but with the real purpose of enabling defendant to secure all the stock of said Company from the holders thereof at a nominal price, the directors not intending to collect said assessments from the defendant; that plaintiff, fearing that the assessments would be enforced and other assessments levied, and fearing that no part of the proceeds would be applied to the legitimate purposes of said Company, sold to defendant his said stock at $2.50 per share; that the assessments levied were not enforced; that no further assessments were levied, and that the stock is now of great value.
H. B. Cabot and W. R. Trask for the Plaintiff.
W. A. Hayes, Jr., and W. C. Osborn for the Defendant.
Keener, J. The plaintiff asks to have a sale of stock made by him when called upon to pay assessments set aside, and the defendant declared a trustee thereof. He alleges as reasons why the Court should give him such relief: 1. That the assessments were levied, not to advance the interests of the Company, but at the dictation of the defendant to enable him to purchase the stock at a nominal price. 2. That the directors did not intend to collect the assessments from the defendant.
It does not appear from the allegations of the bill that the plaintiff knew of either of these facts when he sold his stock. That he sold his stock, not because of a knowledge of these facts, but because, owing to a want of confidence in the management of the directors, he preferred making a profit of two dollars per share to risking more money in the enterprise, is evident from the statement in the bill that “plaintiff, fearing that the assessments would be enforced and other assessments levied, and fearing that no part of the proceeds would be applied to the legitimate purposes of said Company, sold to defendant his said stock.”
The plaintiff, however, contends that the existence of these facts rendered the assessments null and void; and that when he sold, in consequence of a representation that assessments had been levied, the sale was induced by a false representation, to which the defendant was a party. One must not confound the doing of an act with the motive prompting it. The directors in levying assessments merely did what they were empowered to do, namely, called upon the plaintiff to perform his contract. The secret motive, whether good or bad, inducing them to exercise the power could not affect the levy, or change the plaintiff’s obligations under that levy. Oglesby v. Attrill, 105 U.S. 605 (semble). That the directors did not intend to collect the assessments from the defendant did not invalidate the assessments. Each stockholder has an interest in the subscription contract of every other stockholder that cannot be destroyed by an agreement or understanding such as the plaintiff alleges existed here between the directors and Attrill.
Notwithstanding the existence of such an agreement the defendant could have been compelled to pay the assessments. Preston v. Grand Collier Dock Co., 11 Sim. 327; Melvin v. Lamar Ins. Co., 80 Ill. 446.
In Preston v. Grand Collier Dock Co., a bill filed by a stockholder to compel certain other stockholders to pay assessments, the directors having refused to collect the assessments on certain stock, was sustained on demurrer.