If a plaintiff discontinues an action against one of two defendants and by mistake of remedy proceeds unsuccessfully against the wrong defendant, this is no bar to a subsequent action against the other.
An infant does not lose his right to disaffirm a contract because he cannot put the other party to the contract in statu quo.
The subscribers for shares of a corporation that has voted to wind up its business and has transferred all its property to a new corporation formed for the purpose, who receive certificates for shares in the new corporation to the number subscribed for in the first corporation, continue to be stockholders of the first corporation and are not partners in relation thereto.
MORTON, J.
The plaintiff, a minor, originally brought suit against the defendant corporation and the Mount Pleasant Mills Corporation. When that case came to trial he elected to proceed against the Mount Pleasant Mills alone, and discontinued as to the present defendant. The Mount Pleasant Mills had judgment and the plaintiff appealed and the judgment was affirmed by this court. The case is reported in 172 Mass. 462, and the material facts are the same in this case as they were in that. This action was brought after the case against the Mount Pleasant Mills was disposed of. It is manifest that the discontinuance of the former action against the present defendant and its prosecution against the Mount Pleasant Mills alone, being a mistake in regard to a matter of remedy merely, cannot operate to prevent the maintenance of this action. Butler v. Hildreth, 5 Met. 49, 52. If the transaction had stopped with the defendant corporation and the Mount Pleasant Mills had not been organized, we do not understand the defendant to contend that the plaintiff upon disaffirming his subscription and tendering back the receipt would not have been entitled to recover of the defendant the thousand dollars which he had paid. The defendant's contention is that it voted as it had the right to do to close up its affairs and transfer all its property to the Mount Pleasant Mills; that it made such transfer and received therefor stock in the latter company as agreed; that the plaintiff knew and assented to all that was done and surrendered his receipt to the Mount Pleasant Mills and received from it a certificate of ten shares in that corporation in lieu of the ten shares for which he had subscribed and paid in the defendant corporation, and that he cannot now disaffirm the original transaction and all that has been done and recover back the money paid by him to the defendant. In other words the defendant's contention is that the plaintiff cannot be allowed to disaffirm and to recover because the defendant cannot be put in statu quo, as it is clear that it cannot. If the plaintiff's right of recovery depends on his putting the defendant in statu quo he must fail. But the right of a minor to disaffirm a contract does not depend on his putting the other party in statu quo. If it did he would lose in many cases the protection which the law affords him by reason of his minority. Morse v. Ely, 154 Mass. 458. Dubé v. Beaudry, 150 Mass. 448. McCarthy v. Henderson, 138 Mass. 310. Walsh v. Young, 110 Mass. 396. Chandler v. Simmons, 97 Mass. 508, 514.
In some cases it has been held that where the contract was beneficial to the minor and had been executed, he could not disaffirm without putting the other party in statu quo. Breed v. Judd, 1 Gray, 455. Welch v. Welch, 103 Mass. 562. But this is not such a case. If it is for the minor to elect whether a contract is beneficial or not, then the plaintiff has exercised his election to disaffirm in this case. If it is a matter of law whether the contract is to be regarded as beneficial, it clearly could not be held in this case that it was beneficial. The defendant contends that after the votes to wind up its business and after the transfer of its property to the Mount Pleasant Mills, the rights of the stockholders of the defendant corporation were similar to those of partners upon a dissolution of a partnership. But the corporation was not dissolved and as between themselves or between themselves and others, the members of the corporation were stockholders and not partners. And, in the absence of fraud or misrepresentation on the part of the plaintiff, we do not see how the fact that with his knowledge and assent the defendant corporation has transferred all its property and assets to the Mount Pleasant Mills can estop him from disaffirming what he has done and from maintaining this action against the defendant.
Judgment affirmed.