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Graham v. C. L. Chapman Cream Separator Works

Supreme Court of New York, Appellate Division

May 3, 1911

FRANK H. GRAHAM, as Trustee, Respondent,
v.
THE C. L. CHAPMAN CREAM SEPARATOR WORKS, Appellant, Impleaded with CLARENCE L. CHAPMAN, Treasurer, and Others, Defendants.

APPEAL by the defendant, The C. L. Chapman Cream Separator Works, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Allegany on the 1st day of July, 1909, upon the report of a referee appointed to hear, try and determine the issues herein.

The action was commenced on the 28th day of February, 1908, by the plaintiff, as trustee for certain subscribers who had subscribed to and paid to him the amount of their

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respective subscriptions to a fund of $1,500, which it was agreed should be paid by the plaintiff to the defendant upon the agreement on its part that it would remove its plant for the manufacture of cream separators from Erie, Penn., to the village of Friendship, N.Y. One thousand and fifty dollars of such subscriptions had been collected and paid over to the defendant by the plaintiff, when, as is claimed, the defendant broke its agreement and declared its intention not to engage in the manufacture of separators in the village of Friendship. Thereupon the plaintiff refused to pay the balance of said $1,500, demanded the repayment by the defendant to him of the $1,050, which was refused, and thereupon brought this action.

The action as originally brought included as defendants the president and treasurer of the defendant as such and the Drake Hardware Company. At the close of the plaintiff's case a nonsuit was granted as to each of said defendants and the case proceeded solely against the appellant herein.

COUNSEL

A. B. Ottaway, for the appellant.

Joseph F. Rice, for the respondent.

MCLENNAN, P. J.:

The defendant is a foreign corporation, organized under the laws of Pennsylvania, and at all the times herein mentioned had a manufacturing plant and was engaged in the manufacture of cream separators in the city of Erie, in said State of Pennsylvania, and C. L. Chapman was president and treasurer of such corporation. In the early part of the year 1907 negotiations were commenced between the president and treasurer of the defendant and certain residents of the village of Friendship looking to the removal of defendant's manufacturing plant from the city of Erie to the village of Friendship, and as a result the residents of such village were given to understand that such removal would be made if they would raise $1,500 as a bonus and cause the same to be paid to the defendant. As a result of such negotiations and understanding, a subscription paper or agreement was prepared, which was signed by a large number of residents and citizens of

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Friendship, the amount of their subscriptions aggregating said sum of $1,500. Said subscription agreement recited that:

'WHEREAS, the said Company [the defendant] as a condition precedent to the payment of said bonus, will enter into a contract with the trustee [the plaintiff] for the subscribers hereto, whereby said Company will covenant and agree, among other things, that: (1) They will procure forthwith a suitable site, and as soon as practicable erect thereon a building and equip the same with the machinery necessary for the manufacture of Cream Separators; said plant to be ready for use by April 1st, 1908; (2) As soon as said plant is ready for occupancy and use, they will commence the manufacture of separators, and for and during the five years next ensuing they will employ in and about said factory, an average of not less than twenty-five men per day, during at least three hundred days in each year; (3) In the event of their failure to comply with the provisions of said contract, they will repay to the subscribers or their trustee, the said fifteen hundred dollars on demand after said forfeiture; (4) That the trustee for the subscribers shall have a first lien upon the plant and property of the said Company to secure such repayment of the bonus money in event of forfeiture: Now, therefore, for the purpose of inducing the said C. L. Chapman Separator Company to locate in Friendship, upon the conditions above set forth, I, the undersigned, do hereby subscribe the sum set opposite my name below and promise to pay the same, within fifteen days from date thereof, to Frank H. Graham, as trustee, for the subscribers thereto, and I hereby expressly authorize and direct the said trustee to pay the amount of such subscription to the said C. L. Chapman Separator Company upon the execution and delivery by them of a duly authorized and executed contract which shall include among its provisions substantially the covenant above set forth.'

This subscription agreement was dated on the 19th day of August, 1907, and, as before said, was signed by a large number of citizens of Friendship, their entire subscription aggregating $1,500. Thereafter, and on the 24th day of August, 1907, an agreement was made by and between Frank H. ...


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