citing, Van Aernam v. Blustein, 102 N.Y. 360, 7 N.E. 537 (1886)
How later courts described this case
- citing, Van Aernam v. Blustein, 102 N.Y. 360, 7 N.E. 537 (1886)
- "[T]he clauses [of the indenture] ... only relate to and control procedure under the trust indenture itself for the purpose of enforcing payment of coupons and do not for any other purposes work or permit a postponement of the time of payment of the coupons or prevent a bondholder from enforcing his ordinary and general remedies at law for the collection of such obligations.”
- same, quoting U.C.C. § 3-105(b)(2)
- “an order or promise to pay out of a particular fund is not unconditional”
Written by the judges who cited it.
The opinion
I agree with the opinion of Judge WERNER that if the clause in the bonds in controversy here relieving the shareholders from personal liability were effective, it would render the bonds non-negotiable and lead to a reversal of the order below. But I also agree with him that such exemption clause is repugnant to the general tenor of the bonds which are intended to be negotiable and which have been purchased by the public as such and, therefore, should be eliminated and disregarded. Still further, I agree with the opinion of Judge EDWARD T. BARTLETT that any provision in the contract of a joint stock association relieving the shareholders from liability is contrary to public policy and void, since it would enable the shareholders of such associations to obtain all the immunities of stockholders in a corporation without incorporating and subjecting themselves to the restrictions and regulations imposed by law on corporations. *Page 194