text:
    Farmers’ National Bank of Annapolis, Respondent, v. William A. Underwood, Appellant, Impleaded with Clarence H. Venner.

      Examination of a non-resident party plaintiff befoi'e action — relative rights of a resident and non-resident party — power of the court to extend the time to ansioer where a non-resident plaintiff will not submit to an examination.

    In an action brought by a corporation located at Annapolis, Md., the defendant obtained an order for the examination of the president of the corporation, a resident of Annapolis, directing him, as an adverse party, to appear for examination in New York, the object being to secure certain information which would assist the defendant in framing his answer. The defendant having procured an order for service without the State, service was made upon the president in Annapolis, and also upon the attorney for the plaintiff; the president not appearing upon the return day, the defendant moved to dismiss the' action, but the court denied the motion, and ordered the defendant to answer within ten days.
    The plaintiff made no motion to vacate the order for the examination of its president.

      Hekl, that while the order remained in force the court must assume that it was regularly made, and that it was the duty of the plaintiff either to obey it or to move to vacate it;
    That where an order was in full force and effect there was no distinction, with regard, to obeying it, between an order directed against a resident and one directed against a non-resident;
    That a non-resident plaintiff could not claim rights and immunities denied to a resident party, and ignore orders of the court brought to the actual knowledge of his attorney or himself;
    That while it might be that since the Code of Civil Procedure (§ 878) has provided that service of an order “must be made within the State,” the court could not, by service without the State, require a non-resident party to come into the jurisdiction and submit to an examination, or punish him for con tempt for not doing so, yet tlie court had power, in a proper case, to direct that, unless a non-resident plaintiff did submit himself to examination, the time within which the defendant must answer should be extended, or other relief afforded, which would give tlie defendant the same rights against a nonresident as he would have against a resident plaintiff;
    That the order requiring the defendant to serve his answer within ten days should be reversed, and that his time to answer should be extended until the plaintiff submitted himself to the jurisdiction of tlie court, or until he applied for and secured a vacation of the order for his examination.
    Appeal by tlie defendant, William A. Underwood, from an order of tlie Supreme Court, made at tlie New York Special Term and entered in tlie office of tlie clerk of tlie county of New York on tbe 24th day of September, 1895, denying said defendant’s motion to strike out the complaint and dismiss tlie action.
    Tlie order appealed from not only denied tlie relief asked by said defendant, but extended relief to the plaintiff by requiring the said defendant to serve liis answer witbin ten days from tlie entry and service of tlie order appealed from.
    This action was commenced by the service of a summons and complaint on the 9tli day of November, 1894. The plaintiff is a banking association transacting business in Annapolis, Maryland, where its president resides. On January 9, 1895, the defendant Underwood obtained, ex parte, an order to examine the president of plaintiff as an adverse party and for an inspection and discovery of plaintiff’s hooks, which order ivas vacated on plaintiff’s motion. Subsequently two other orders requiring plaintiff to give certain information were obtained, one of which was granted in part and in part denied, and the last one of which was vacated on plaintiff’s application. This being the situation of the proceedings, the defendant Underwood, on June 1,1895, obtained an order for tlie examination of tlie president as an adverse party, directing him to appear for such examination in New' York city. As this could not be served within the State an order for service without the State ivas secured, and thereafter the service was made in Annapolis on tlie president and on the plaintiff’s attorney. By reason of certain defects two other orders were obtained, and finally on June eighteenth an order was secured extending the time for the taking of the deposition and examination, as provided for in the order of June first, until the 20th day of June, 1895, and further providing for service of the orders and copy of the last, order, and the affidavit upon which it was granted, “ upon the attorneys of said plaintiff, and upon the said J. Wirt Randall, the president of the plaintiff, within or without the State, wherever he may be found, on or before the 19th day of June, 1895.” This order was served, in accordance with its provisions, upon the attorney and the president, but on the return day the latter did not appear. Thereupon the defendant moved to strike out the complaint and dismiss the action, and for other relief, which motion was denied, and an order was thereupon entered which, besides denying the motion, contained this provision : “ Ordered, peremptorily, that the defendant William A. Underwood serve his answer herein upon the plaintiff’s attorney within ten days after service of a copy of this order.” The questions presented for consideration arise upon the appeal from this last order.

      Walter II. Underwood, for the appellant.

      Ghas. De Hart Brower, for the respondent.
   O’Brien, J.:

It is conceded that plaintiff did not move to vacate; that its president did not appear for examination, and that the order of June first, as subsequently amended, was in full force and vigor at the time the motion was made to dismiss tire complaint. Upon this appeal, however, it is insisted that such order is void, because providing for the examination of the plaintiff’s president in New York city, while the papers show that he resided in Annapolis, and that he could not be served within the State. And this proposition is seemingly supported by the case of Witcher v. Tribune Association (14 N. Y. Supp. 291). In the opinion in that case it is said : “ If it (the order) had been made ex parte, and the plaintiff had mbved for its vacation upon affidavit showing that he is a non-resident and that service cannot be made upon him in this State, the court would have been bound to vacate it under the decision of the General Term of this court in Dunham v. Insurance Co. (44 N. Y. Super. Ct. 387; 6 Abb. N. C. 70). There is no power in the court to require the plaintiff, as a resident of another State, to come to New York from such State for the sole purpose of being examined.” Without expressing assent to these views we do not think such question is involved, the order for tlie examination not having been assailed by motion or vacated. As long as it remains in force it must be assumed to have been regularly made, and the duty was upon the plaintiff either of moving to have it vacated or of complying with its terms.

Although differing in its facts, the principle here involved is somewhat analogous to that in tlie cases of Dudley v. Press Pub. Co. (53 Hun, 347; 58 id. 181). In the former, plaintiff moved to vacate extensions of time granted to defendant, and, it appearing that efforts to serve an order for plaintiff’s examination were unsuccessful, because plaintiff had left the State, it was held that so long as the order for the plaintiff’s examination remained in force it must be held to have been regularly made, and that it entitled the defendant to an examination of the plaintiff as a witness under its direction before the defendant could be compelled to serve an answer in the action. As therein said: ££ And if he fails to comply with the order legally and properly made, after being, by its service, bronght to the knowledge of himself or his attorneys, lie may forfeit his right to proceed in the action, and even entitle the defendant to a dismissal of his complaint.” And in 58'Hun, 181, where the plaintiff moved to vacate the order for his examination, it was said : “ No opportunity, therefore, was afforded to the defendant to make a personal service of this order upon the plaintiff. But from the other circumstances in the case * * * it is evident that the 'plaintiff has been actuated with the intention when he has visited this city of evading the service of the order and practically declining to obey its mandate; and, under these circumstances, the court could not, with any just respect for its own proceedings, listen to his appl.'cation to vacate either of these orders. It is liis duty as a suitor in court to obey the direction given by its justices for the purpose of promoting tlie proceedings in the litigation, and, as long as he intentionally avoids placing himself where he may be personally served witlytlie order, he cannot consistently expect to be heard in an application to vacate it.”

It is true that in both these cases the relief was denied upon the ground that the plaintiff was guilty of misconduct and ivas contumacious, in that, being a resident of tlie State, lie refused to obey an order served upon him within the State, and, as to another order, absented himself so that service could not be obtained. They are authority, however, for the proposition that as long as the order for-the examination remains in full force and effect it cannot be-treated as a nullity, but that it is the duty of the person against whom it is obtained either to obey it or to move to have it vacated.

The regularity and sufficiency of the papers upon which the order of June first was granted having never, therefore, been called in question, it must be assumed that the order is a proper one and made upon proper application. And the order for the ex-amination of the plaintiff’s president being in full force and effect, the defendant was entitled to the benefit of such examination, and, failing to obtain the same by the default or disobedience of the plaintiff, he was seemingly entitled to some relief, for which he applied to the court.

The suggestion that, with regard to obeying orders, there is a distinction between those made as against a resident and those made-against a non-resident party, if recognized, would present an anomaly in our practice; because in effect it would be according to a nonresident, rights and juivileges which are denied to our own citizens. It would in effect be holding that while in an action brought against a resident he must submit to all the orders and mandates of the court, a non-resident can choose this forum and proceed in utter disregard of the court’s directions. We do not think a non-resident, plaintiff can claim rights and immunities denied to a resident party and ignore orders and directions of the court brought to the actual knowledge of his attorney or himself. Non-residence does not-enlarge his rights or diminish those of the defendant. If such a rule were to prevail, it would be easy to have claims assigned to-non-residents, or in cases where they had claims in their own right, to place themselves just outside of the jurisdiction of the court and proceed against our citizens without being amenable to the orderly procedure which in actions affords to a defendant certain rights as-against the plaintiff.

It may be, since the Code of Civil Procedure provides (§ 873) that service of the order “ must be made within the State,” that tlie> court is without power by service without the State to require a nonresident party to come into the jurisdiction and submit to an examination, or punish him for contempt should he disobey such an order.. But this is an entirely different thing from saying that the court has. not the power to direct, upon a proper showing being made by a defendant for tlie examination of a non-resident plaintiff, that until such plaintiff shall submit himself to the jurisdiction of the court for the purposes of such examination, the time within which the defendant shall be required to answer shall be extended, or such other relief afforded as .will accord to the defendant the same rights against a non-resident as he would have against a resident plaintiff. Without passing upon the question, therefore, as to whether the court, by reason of the failure of such non-resident to appear within the jurisdiction for the purposes of service, could grant the motion to dismiss the complaint or the action, we think that it was not without power to accord some relief, and that it was erroneous, where such relief was asked, for the court, not only to deny it, but to go. one step further and peremptorily direct that the appellant should serve his answer within ten days.

We think, therefore, that so much of the order as requires the appellant to serve his answer should be reversed, and that relief should be accorded to the appellant by extending his time to answer until such time as the plaintiff submits itself to the jurisdiction of the court or applies for and secures a vacation of the order for the examination of its presilent.

Order accordingly reversed, with ten dollars costs of the motion below and ten dollars costs on this appeal and disbursements.

Yan Brunt, P. J., concurred.

Order reversed as directed in opinion, with ten dollars costs and disbursements of appeal and ten dollars costs of motion in the court below.


source: Caselaw Access Project

author: O’Brien, J. : Van Brunt, P. J., and Follett, J.:

license: Public Domain

text:
    Willcox & Gibbs Sewing Machine Company, Plaintiff, v. Jehiel W. Himes, Defendant.

      Contract — waiver of a return, and as a consequence of any claim, for rent, of machines.

    Upon tlie trial of an action, brought to recover an agreed rent for the use of certain machines, it appeared that the plaintiff leased to the firm of Himes & Yail„ of which firm the defendant was the successor, a number of machines for manufa cturing hosiery, etc., upon an agreement which provided three different modes: of payment; the first was based upon the articles manufactured at certain schedule prices, in case the lessee made no return; the second was the amount shown to be due by the return when such returns were made; 'the third was the payment of the sum of twenty-five dollars a month for each machine leased, as a rental during each and every month for which returns and payments had not been made.
    The lessee had a right at any time to surrender the machines and terminate all liability under the contract.
    The plaintiff brought the action to recover the sum of twenty-five dollars per month for each machine delivered to and retained by the defendant; the defendant interposed, among other defenses, the defense that the defendant had made a return to the plaintiff showing that during a certain period no goods had been manufactured, and had offered to surrender the machines, but, at the request of the plaintiff, had retained the machines.
    In support of this defense, it appeared that early in 1885 and at the time of the last return made, there was written upon the face of that return the words “no production;” that at about this time a Mr. Garrett, the manager of the defendant’s hosiery department, advised the -defendant -not -to send back, the machines, and said that the plaintiff was getting up a new machine which the plaintiff proposed to allow a few people to have; that it would be a great benefit to the trade and would be exclusive.
    The court, however, refused to allow the defendant to show that he had manufactured no goods upon any of the machines after December 31, 1884.

      IMcl, that it was erroneous for the court to direct a verdict for the plaintiff; 'That, as the contract permitted the lessee to surrender the machines, provided he had fully performed the contract upon his part, he had a right to show, upon the question of the plaintiff’s having waived the surrender, that he had manufactured no goods after the time of his conversation with Mr. Garrett, and thereupon a proper question would have arisen for the determination of the jury, as to whether it was intended that the defendant should pajr any more rent after he had ceased to use the machines, had offered to return them, and had been requested not to do so. (Per O’Brien, J.)
    Motion by the defendant, Jehiel W. Himes, for a new trial on a ■case containing exceptions, ordered to be heard at the General Term in the first instance x\pon the verdict of a jury in favor of the plaintiff rendered by direction of the court after a trial at the New York Circuit on the 12th day of February, 1895.
    This action was brought upon'a written contract made on the 11th day of February, 1882, by which the plaintiff let and hired to the firm of Himes & Yail, to which firm defendant succeeded, a number of its machines, upon the covenant that the lessee should use the machines in the manufacture of hosiery, shirts and drawers and should make monthly returns to plaintiff of the quantity of .goods so manufactured therewith, and should make monthly pay ments corresponding to such returns according to a schedule of rentals therein agreed to by the parties. The contract further provided that, at the option of the lessor, the lessee should pay to the lessor the sum of twenty-five dollars for each machine leased by him during each month for which the returns and payments required by the agreement had not been made. The defendant received eleven machines in all, the first having been delivered in February, 1882, and the last in April, 1884. Defendant made monthly returns and payments until January 1, 1885. Thereafter, in December, 1891, this action was commenced to recover the sum of twenty-five dollars per month for each machine delivered and retained by the defendant. The defenses are, the failure of plaintiff; to allege or prove demand for the payment of the rates specified in the contract, or for the payment of twenty-five dollars a month for each machine let; the failure tó prove that the defendant used any of the machines; and the defense of surrender.
    On the trial defendant proved that early in 1885 he made a return covering’ the period from October 1, 1884, to December 31, 1884, both inclusive, and that upon the face of the return were written the words “No production.”- Defendant then offered evidence tending to show that he had manufactured no goods by any of the machines after December 31, 1884, but such evidence was excluded. He proved however that in December, 1885, he had a talk with one Mr. Garrett, a representative of plaintiff, in which the latter said, “ You are not making any returns; ” to which the defendant replied, “ No, sir, we are not using the machines, and we aré going to send them back.” Mr. Garrett then urged him not to do so, stating that the plaintiff was getting up a new machine, which would be of great benefit to the trade and would be exclusive. From this time (December, 1885) until 1891 Garrett was in communication with the defendant about this promised new machine, known as the “ overlook ” machine.
    Upon the conclusion of this testimony the court directed a 'verdict for the plaintiff and ordered the exceptions to be heard in the first instance at General Term.

      George W. Van Slyele, for the plaintiff.

      Austen G. Fox and Arthur II. Hasten, for the defendant.
   O’Brien, J. :

Tlie first question relates to the construction of the written agreement entered into between the parties, and for its discussion a reference to its salient features is necessary. It provided that, upon certain considerations therein expressed, the plaintiff “doth hereby lease untp said lessee ” the machines (describing them) “ and the lessee hereby agrees to keep and perform all the conditions of the lease, to wit:

Fi/rst. * * * to pay unto the lessors as rent for the use of the machines hereby leased the following sums or rates for all goods made wholly or in part by the aid of said machines or any of them, viz.: ” (Then follow the rates.)
“ But in all cases where the lessee shall make the returns and payments as hereinafter required, according to the following schedule' of rentals, * * * the following amounts will be accepted by the said lessor, * * * viz.: ” (Then follows a schedule.)
“ If, however, returns and payments are not made according to the provisions of this'instrument, then the lessee shall be and is firmly held and bound to pay unto the lessor the amounts first hereinbefore specified; or said lessor may, at its option, demand and •collect, and said lessee hereby agrees to pay, the sum of $25 ]ier month for each machine hereby leased during each and every month for which the returns and payments required by this agreement have not been made. * * *
Second. The said lessee agrees to keep correct record of all goods manufactured,” to be open to the inspection of said lessor, ■and to make returns monthly for all goods manufactured during the preceding month. “If no goods have been so manufactured during •said month, the said lessee shall so report.”
Fifth. * * * But the lessee has the option at any time to ■surrender said lease and the machines mentioned herein, provided he shall have complied with all and singular the obligations of this instrument and settled his indebtedness to the lessor thereunder; and upon such surrender of said lease and machines the lessee shall be discharged and released from all and any obligations, agreements •and covenants herein assumed by him.”

It will be noticed at the outset that the contract provided three •different modes of payment; one based upon the articles manufac■turecl at certain schedule prices in the event of the failure of the lessee to make returns; another, the amount shown to be due by the returns when returns were made; and the third, the sum of twenty-five dollars a month for each machine leased, as a rental during each month for which the returns and payments have not been made. It was thus in the power of the defendant to make returns and so limit the amount to which the plaintiff would be entitled.' If, however, the defendant failed to make returns, then there were two ways provided by which the plaintiff could exact payment. If it could obtain the information as to the articles manufactured, it could charge the increased rate; or, waiving this, it had the option to exact from the defendant a rental of twenty-five dollars a month for each machine. The latter was the course followed. In the contract itself it will be fouud that nothing is said about the use of machines, but it is provided that the twenty-five dollars is for each machine leased, not, as contended for by defendant, for every machine used. We think the plaintiff’s contention is sound, that the construction to be given to this language is the same as that to be given to contracts between landlord and tenant; and in an action for- rent it clear-ly would be unavailing for the tenant to show that while he continued in possession of the premises lie- did not actually occupy them. So here, while the defendant continued in possession of the machines, he was liable under the contract the same as a tenant under a lease. Our view as to the construction of this part of the agreement is, that where no goods were manufactured the defendant could so report and relieve himself from the payment of rental ,• but where he did not report, or did not surrender the machines, but retained them, then he was liable to the plaintiff in the sum of twenty-five dollars a month ÍGr each machine retained, whether used in the manufacture of goods or not.

This-naturally brings us to a consideratiou of the evidence adduced upon the trial in support of the defense that a report was made to plaintiff that no goods were being manufactured upon the machines, and that in December, 1885, an offer to surrender was made, which was not carried out because, at the request of plaintiff, the machines were retained. We think that if evidence was offered to support this defense from which the jury could have legitimately inferred'tliat the parties to the agreement understood the situation to be the same as it would have been had the defendant returned the machines, then it was error to direct a verdict and refuse defendant’s request to go to the jury upon this question.

It will be recalled that early in 1885 defendant made a return covering the period from October 1, 1881, to December 31, 1881, inclusive, and that upon the face of the return were written the words “No production.” Asno returns -were made for the year 1885, it may be that the court would have been justified in directing a judgment from that time down to the month of December, 1885, when, as testified to by the defendant, he had the conversation with the representative of the plaintiff, Mr. Garrett, in which the latter said, “You are not making any returns;” to which the defendant replied, .“No, sir, we are not using the machines and we are going to send them back.” Mr. Garrett then said: “No, don’t do that; we want to keep in with you people, a few of our friends; we are getting up a new machine which is going to be a great benefit to the trade, and it will be exclusive; we propose to let you and Mr. McDowell have it, as you have been using our old machines.” Defendant further testified that from that time he never used the machines.

It is clear from the agreement that the defendant, by paying what was due up to December, 1885, when this conversation took place, could have surrendered the machines by returning them, and it is equally clear that such surrender and payment could be waived by the plaintiff, and, instead of being sent back, the machines could have been retained by defendant at plaintiff’s request without his being liable to pay any rent therefor, provided they were not used in manufacturing goods. The defendant having given evidence from which it could be legitimately inferred that the provision of the contract as to the manner of surrender had been waived by plaintiff, followed up as it was by an offer of evidence tending to show that he had manufactured no goods by any of the machines after that time, we think a question was presented for the jury as to whether or not the parties to the agreement intended that the defendant should pay any sum whatever after he had ceased to use the machines and offered to return them and had been requested not to do so. As appears by the record, Mr. Garrett, with whom such conversation took place, was in court, but did not dispute defend ant’s evidence nor deny liis own authority in the premises; and while upon this appeal the latter is called in question, the treasurer and secretary of plaintiff, who was intrusted with the management of the entire business, testified that Mr. Garrett was manager for a number of years of the hosiery department, as it was called; that is the department through which those machines are leased and operated; it is a special department of the business through which the machines covered by the agreement put in suit here are leased and put on the market; he had entire charge of that matter under me; he had authority in that department to a certain extent; he would attend to the making of the leases, and attend to the receiving of the returns and keeping up the records, and generally taking care of that business in detail; sometimes he would make visits to the lessees in behalf of the company; that was so from 1882 until 1890 or 1891.”

We think that upon such evidence there was a question of fact presented, and that the jury could infer that by reason of this conversation the defendant refrained'from surrendering the machines, and that both parties understood that the situation was the same as it would have been i'f he had made the surrender in fact. This being so, the direction of a verdict was error, and there should be a new trial, with costs to defendant to abide the event.

Van Brunt, P. J., and Follett, J.:

We concur in result. There was no question to go to a jury; the agreement of the parties was unambiguous and nothing was due if no goods were manufactured and no report was made, and the subsequent arrangement did away with the necessity of a report.

Exceptions sustained, new trial granted, with costs to defendant to abide event.


author: Follett, J.: O’Brien, J. Lawrence, J.:

text:
    Abbie S. Nash and Others, Appellants, v. The Hall Signal Company, Respondent, Impleaded with Others.

      Corporation — right of a stockholder to sue for the torts of directors — non-residence, not presumed — bona fide holding of stock, presumed — when a complaint is i multifarious — who may object.

    Where a corporation refuses to prosecute individual directors who are alleged to have been guilty of an abuse of their trust, or of a misapplication of the funds of the corporation, and such directors are still in control, stockholders are . entitled to sue for redress in their own name.
    An objection taken by demurrer to the jurisdiction of the court based upon the non-residence of the plaintiffs, is not tenable unless the fact of non-residence appears upon the face of the complaint.
    Where a demurrer is interposed to a complaint in an action brought by stockholders, who allege that the directors of a corporation have abused their trust and misapplied the corporate funds, the court will presume that all the plaintiffs are bona fide holders of their stock; and where it does not appear affirmatively upon the face of the complaint that any one of the plaintiffs acquired his stock subsequent to the transactions complained of, the court cannot regard an allegation to that effect contained in one of the grounds of demurrer.
    Where two causes of action are joined in the same complaint, a demurrer to the complaint upon the ground that all of the defendants are not affected by . both causes of action will lie, even at the instance of a defendant who is so affected.
    If “A & B, directors in a corporation, waste its funds during one year, and B and C, directors, by some act not connected with the first devastavit, waste the corporate funds in another year, the three cannot be joined as defendants in an equitable action brought by or in behalf of the corporation to compel them to account for and pay the damages sustained by reason of these independent wrongful acts.”
    A complaint so drawn is multifarious, within the meaning of subdivision 7 of section 488 of the Code of Civil Procedure.
    O’Brien, J., dissenting.
    Appeal by tlie plaintiffs, Abbie S. Nasli and others, from an interlocutory judgment of tlie Supreme Court in favor of the defendant, The Hall Signal Company, entered in the office of the clerk of the county of New York on the 3d day of July, 1895, upon the decision of the court rendered after a trial at the New York Special Term sustaining the said defendant’s demurrer to the complaint, with notice of an intention to bring up for review upon such appeal an order entered in said clerk’s office on the 24th day . of June, 1895, sustaining the demurrer, and directing the entry of judgment.

      Austin Abbott, for the appellants.

      Gharles M. Ka/rle, J. 8. JO Amor earn and Witter & Kenyon, for the respondent.
   Follett, J.:

In case A and «B, directors in a corporation, waste its funds during one year, and B and 0, directors, by some act not connected with the first devastavit, waste its funds in another year, the three cannot be joined in an equitable action brought by or in behalf of the corporation to compel them to account for and pay the damages sustained by these independent, wrongful acts. Wasting the property of a corporation by its directors is a tort. A is not liable for the acts of B and 0, and C is not liable for the acts of A and B, and these independent, tortious acts constitute distinct causes of action which cannot be united in one complaint. .

The interlocutory judgment should be affirmed, with costs, on the opinion of Lawrence, J., at Special Term.

Yan Brunt, P. J., concurred.

Judgment affirmed, with costs.

O’Brien, J.

(dissenting):

Upon the authority of Brinckerhoff v. Bostwick (88 N. Y. 52) I think the action is maintainable. The suit is one brought by stockholders who, on behalf of the corporation, demand an accounting for property which has been taken, or allowed to be taken, from the corporation. The acts complained of, although happening at different periods of time, are but cumulative and constitute a single cause of action. It is true that certain of these defendants were not directors, but were transferees of the assets of the corporation; but their being made parties does not change the nature of the action, nor make what was one cause of action multifarious. The purpose sought is to enable a court of equity to reach out and recover diverted assets. Although different relief may be accorded as against the different defendants, this does not effect a severance or multiplication of the cause of action. I do not think the demurrer upon this ground is good, and, as it was sustained in the court below, the judgment sustaining it should be reversed.

The following was the opinion of the Special Term:

Lawrence, J.:

This is an action brought by resident stockholders of the Hall Signal Company, a corporation created under the laws of the State of Maine, having its business office in New York, against its directors and their transferees of its assets. The plaintiffs sue on behalf of themselves and all other stockholders who shall come in and contribute to the expenses of the action, and the corporation is joined as one of the defendants. It is alleged in the complaint that the directors, or some of them, have voted money and treasury stock from the treasury to some of their own number, and to their superintendent in some cases, without legal consideration; in some cases for grossly inadequate consideration ; in some cases when no quorum was present; in some cases when, the presence of the donee was necessary to a quorum; in some when the vote of the donee was necessary to a majority, and in all cases contrary to the standing rule of the board established under the direction of a,stockholders’ meeting. It is also alleged that they have voted treasury stock to some of their own number at fifty dollars when they knew that said stock was selling at over ninety dollars per share; that they have taken stock from the treasury at fifty dollars per share and with it filled orders at ninety dollars and over, obtained from the purchasers by the company’s agent; that the directors have failed properly to apply and account for moneys received by them for the company; that they have neglected its interests and imperiled its assets. It is also alleged that during all this time the corporation had its principal office for doing business in the city of New York, and that those transactions were had in the city of New York, and that the defendants issued their circulars from the office of the defendant company, 50 Broadway, New York. It is further alleged that the principal individual defendants voted 500 shares of the stock to one of their own number, the president, at one-half the par and little more than one-half the market value, under the pretext of remunerating him for “ extraordinary services” previously rendered; that they also voted to him an increase of salai’y to $1,000, and paid him at that rate from January 1,1894, and that he received from them, out of the treasury of the company such back pay. Furthermore, that after their superintendent had been employed about a year and a half at a fixed salary, and had assigned to the comj)any the inventions and improvements made by him, and the company had become the patentee and owner thereof, they voted 3,000 shares of the stock to him, on the pretext that it was a reasonable and necessary compensation for assignments made a year and a half previously, and that the transfer of these 3,000 shares to him was only a cover for allowing the president and treasurer, who are defendants, to take and dispose of the 3,000 shares at their pleasure. Many otliér statements and_ allegations are also contained in the complaint, designed to show that a discovery and accounting is necessary. One of those statements is to the effect that the directors have bought with the funds of the corporation, and without the stockholders’ assent, shares of stock in the corporation theretofore issued to other persons or corporations; that those acts were done with intent to gain control of the corporation and to dictate its corporate acts and the acts of the board- There are many other acts of improper conduct alleged on the part of the directors, or some of them, but enough has been stated to show the general character of the complaint. It is further alleged in the complaint that the reason why this suit is brought by the plaintiffs is that the defendants Hall, Gilmore, Parker, Houston, Webb, Miller and James, or some of them, now compose the board of directors of said corporation, and that it would be useless to ask said board to bring this action, as said directors, or a majority of them, are chargeable jointly and severally with the management of the corporation, and have pecuniary interests opposed to the interest of the corporation and of the stockholders. It is stated in the plaintiffs’ brief, and not denied, that all the individual defendants have answered. The corporation alone demurs to the complaint, assigning as grounds, of demurrer: First. That the court has no jurisdiction of the subject of this action. Second. That the complaint does not state facts sufficient to constitute a cause of action. Third. That the court has no jurisdiction of the defendant. Foxirth. That causes of action have been improperly united, in that a cause of action in equity against the corporation has been joined with causes of action at law against the other defendants, or some of them, specifying the different paragraphs of the complaint in which said alleged improper joinder of causes of action appears, and also that the causes of action stated in the complaint do not affect all the parties to the action. Fifth. That there is a misjoinder of parties plaintiff, in that Charles F. Ulrich appears by the complaint to have received his stock long after each and every of the acts and transactions set forth in the complaint had occurred, while the plaintiffs Abbie S. Nash and Emma S. Nash are alleged to have received their stock in 1892, when some of the transactions and acts set forth in the complaint had not taken place.

By the complaint-it appears that no relief in favor of the plaintiffs individually is asked. The relief prayed for is that the defendants who have not demurred may be required to repay into the treasury of the defendant corporation the amounts alleged to have been illegally taken or obtained by them therefrom. There is enough stated in the complaint, I think, to bring this case within the principle established by Brinckerhoff v. Bostwick (88 N. Y. 52) and Briggs v. Spaulding (141 U. S. 132). It is quite apparent from the allegations of the complaint, and from the demurrer which is interposed in this action, that the corporation refuses to prosecute the individual directors who are claimed to have been guilty of an abuse of their trust or a misapplication of the funds of the company, and it is also quite apparent that the individual defendants, against whom relief is mainly sought, are still in control of the corporation. As was said by Rapallo, J., in the case of Brinckerhoff v. Bostwick (supra):In such cases a demand upon the corporation. to bring the suit would be manifestly futile and unnecessary. A suit prosecuted under the direction and control of the very parties against whom the misconduct is alleged and a recovery is sought would scarcely afford to the shareholders the remedy to which they are entitled; and the fact that the delinquent parties are still in control of the corporation is of itself sufficient to entitle the shareholders to sue in their own names.” (Hodges v. New England Screw Co., 1 R. I. 312; Heath v. Erie Ry. Co., 8 Blatchf. 347.) In addition to the cases above cited, the cases of Holmes v. Abbott (53 Hun, 617), Garner v. Harmony Mills (6 Abb. N. C. 212), Gaines v. Chew (2 How. [U. S.] 619) and Brinckerhoff v. Brown (6 Johns. Ch.-139) are authorities which support the right of the plaintiffs to maintain this action. I am of the opinion also that this court has jurisdiction of the action. (Fisk v. Chicago, Rock Island, etc., R. R. Co., 53 Barb. 513; Code Civ. Proc. § 1780.) The presumption is that the plaintiffs are residents of this State, and objection cannot be taken to the jurisdiction of the court on the ground of their non-residence unless the fact of such non-residence appears upon the face of the complaint. In Gurney v. Grand Trunk Railroad Co. of Canada (37 N. Y. St. Repr. 560, 561) Van Brunt, P. J., said : “ Objection to jurisdiction may be raised by demurrer where it appears upon the face of the complaint that the court has no jurisdiction of the person or subject-matter; but unless want of jurisdiction appears upon the face of the complaint the objection must be raised by a motion to set aside the summons where an appearance would confer jurisdiction, or in cases where an appeai-ance would not confer jurisdiction it may be raised by answer, or at the trial, or upon appeal, or by the court itself.” The demurrer in this case is general, and, as some of the alleged illegal resolutions are stated in the complaint to have been passed at a meeting or meetings of the directors held in the city of New York, it would appear that a general demurrer on the ground of want of jurisdiction cannot be sustained. Without pursuing this branch of the case further, it is sufficient for me to refer to the opinion of Mr. Justice Patterson in denying the motion to continue the injunction granted, pendente lite. (See N. Y. L. J., Feb. 11, 1895 ; S. C., 11 Misc. Rep. 468.) I do not think that the objection that there is an improper joinder of the plaintiffs in this action can be sustained. All of the plaintiffs are stockholders, and, for the purposes of this demurrer, must be presumed to be tona fide holders of their stock, and it does not affirmatively appear upon the face of the complaint that the plaintiff Ulrich acquired or became possessed of his stock after all the transactions, the validity of which forms the subject of this action, had taken place. The remaining question in the case is whether the complaint is not multifarious within the meaning of subdivision 7 of section 488 of the Code of Civil Procedure. Where two causes of action are improperly joined in the same complaint a demurrer to the complaint upon the ground that all of the defendants are not affected by both causes will lie, even at the instance of a defendant who is so affected. (See Nichols v. Drew, 94 N. Y. 22 ; Stanton v. Missouri & Pac. Ry. Co., 15 N. Y. Civ. Proc. Rep. 296.) It is quite apparent that all the causes of action stated in the complaint do not relate to all of the defendants. W ithout specifying all the instances in which causes of action are stated which do not relate to or affect all the defendants, it is sufficient to say that in paragraph 10 of the complaint a cause of action against Hall, Cochran, Gilmore and Ingraham is stated for the sale of stock to the defendant Cochran at an- improper price, and that damages are prayed for against those four defendants for the sale by them as directors to the defendant Cochran. The defendant Miller is not concerned in this cause of action, and had no part in the transaction. So far as can be ascertained from the complaint, Miller did not become a director, nor have anything to do with the defendant company at all until May 4, 1894, when it is alleged that he with other directors voted illegally to increase Hall’s salary. This appears to be the only cause of action against Miller set out in the complaint, except the general charge in paragraph 41, that he failed to keep proper accounts and records of the transactions of the company. The alleged illegal sale of stock to Cochran in 1891 has nothing to do with the alleged illegal increase of the president’s salary in 1894, nor were all of the same directors concerned in both transactions. Again, the allegation contained in the 39th paragraph of the complaint in respect to the alleged illegal transfer to and acceptance by the defendant Webb of stock illegally issued in December, 1893, has nothing to do with the transaction in which Miller is alleged to have been concerned in paragraph 3.0 of the complaint. There are other instances in the complaint of the joinder of causes of action in which some of the defendants were concerned with others in which only a portion of those defendants took part. The case, therefore, seems to fall within the doctrine laid down in Nichols v. Drew (supra) and Stanton v. Missouri & Pacific Railway Co. (15 N. Y. Civ. Proc. Rep. 296). Por these reasons I am of the opinion that the demurrer on the ground that causes of action have been improperly united should be sustained, and that the defendants have judgment thereon, with leave to the plaintiffs to amend upon payment of costs.


author: Follett, J.:

text:
    In the Matter of the Probate of the Last Will and Testament of Mary E. McLarney, Deceased. James E. McLarney, Appellant; James J. Phelan and Michael F. Phelan, as Executors, etc., of Mary E. McLarney, Deceased, Respondents.

      Will — requesting a subscribing witness to sign — will of a married woman, not ' revoked by her remarriage — courts will not enlarge the effect of statutes.

    Upon the probate of a will, on which one of the questions raised was whether the testatrix requested Philip Furlong, one of the subscribing witnesses, to sign the will, Furlong testified that he signed at the request of an attendant upon the testatrix, which request was made in the presence of the testatrix, and that he signed in her presence, but that he did not hear the testatrix request him to sign; he also testified that he was quite hard of hearing. The other subscribing witness testified that the testatrix twice requested Furlong to sign, and that at the second request he came forward and signed the will in her presence and in that of the testatrix.

      Held, that the proof of a request by the testatrix to the witnesses to sign was sufficient.
    The will of a married woman is not revoked by her subsequent remarriage.
    The original provisions of the Revised Statutes denying to certain persons the power to devise real and personal estate were changed, so far as they related to married women, by chapter 782 of the Laws of 1867, and married women now stand in this respect upon the same footing as men.
    It is not’tlie duty of courts to enlarge the effect of statutes by importing into them words and provisions which they do not contain.
    Appeal by tbe contestant, James E. McLarney, from a decree of tbe Surrogate’s Court of'tbe county of New York, entered in said Surrogate’s Court on the 22d day of June, 1895, admitting the last will and testament of Mary E. McLarney, deceased, to probate, and also from tbe decision of the court admitting such will to probate, with notice of an intention to bring up for review upon such appeal an order vacating a stay of proceedings and an order staying administration proceedings, which orders were entered in tbe New York Surrogate’s Court on tbe 1st day of October, 1894.
    July 23, 1884, tbe testatrix, then being the wife of Edward P. Brophy, executed her will by which she disposed of her entire estate. January 29, 1889, her husband died. May 13, 1890, she wrote the following on the back of her will:

      “I, Mary E. Brophy, of the City of New York, being of sound mind, do make, publish and declare this to be my last will and testament in manner and form following, that is to say :
    “ JBirst. I direct that all my just debts and funeral expenses be paid.

      “Second. I give unto my brothers, James J. Phelan and Michael F. Phelan, all my real estate, wheresoever and whatsoever, to have and to hold the same to them, and their heirs and assigns forever, as tenants in common. I hereby request that my said brothers will pay to St. Yincent’s Hospital, also to the Little Sisters of the Poor, $500 each.
    “ Third. I give and bequeath to my cousins, Mary A. and Kate Murphy, all my furniture, carpets, wardrobe and wearing apparel, to have and to hold the same forever.

      “Fourth. I give and bequeath to my nephews, John J. Phelan and James T. Phelan, sons of my brother, all money not invested in real estate or banks, or otherwise, to have and to hold the same forever, but the same is not to be paid to them until they respectively arrive at the age of twenty-one years.
    “ Fifth. I give and bequeath to my three nieces, daughters of my brother, all my jewelry, diamonds. All the residue and remainder of my estate I give and bequeath unto my brothers, James J. Phelan and Michael F. Phelan, to have and to hold the same forever.

      “Sixth. I hereby nominate and appoint my brothers, James J. Phelan and Michael F. Phelan, executors of this my last will and testament, and I hereby revoke all other former wills by me made.
    “ In witness whereof I have hereunto set my hand and seal, at the City of New York, this 13th day of May, A. D. 1890.
    “(Signed) MARY E. BROPHY.”
    February 5, 1894, she married James E. McLarney, the contestant, and, April 19, 1894, she died leaving said will unrevoked. There was no issue of either marriage. May 22, 1894, the executors nominated in the will filed it in the Surrogate’s Court and began proceedings to have it probated. James E. McLarney appeared and contested upon the grounds: (1) That the instrument of May 13, 1890, was a revocation of her will; (2) that the will was revoked by the subsequent marriage of the testatrix; (3) that the execution of tbe will was not tbe free, unconstrained and voluntary act of tlie testatrix; (J) that the testatrix was not of sound mind, memory and understanding when the will was executed; (5) that the will was not subscribed, published and attested in conformity with the statutes in such cases made and provided.
    There was no evidence given on the trial to support the third and fourth objections to the probate of the will. At the close of the trial all of the contestant’s grounds were overruled by the Surrogate’s Court and the will admitted to probate.

      James P. Campbell and Joseph PL. Fcwgis, for the appellant.

      Abel Crooh, for the respondents.
   Follett, J.:

We are asked to reverse the decree of the surrogate on two^ grounds: (1) That there is no evidence that the testatrix requested the subscribing witness, Philip Furlong, to sign as a witness; (2) that the will was revoked by the testatrix’s subsequent marriage to the contestant. The witness Furlong testified that he was asked to' become a witness to the will by Mary Ann Murphy, who was an attendant of the testatrix, then ill. lie testified that he saw tlietestatrix sign the will,' that he signed immediately after, in her presence, pursuant to the request of Miss Murpliy made in the room and in the presence of the testatrix. He also testified that he did not hear the testatrix request hini to sign as a witness, nor did he recollect that he heard her speak on that occasion. The witness-testified that he was quite hard of hearing.' The contestant called as a witness Michael F. Phelan, who testified that he heard testatrix twice ask Philip Furlong to become a witness to the will, and that the 'testatrix said that it was her last will and testament, and she wished him (Furlong) to sign as a witness, and that she said the same thing tó Jane Farrington, the other subscribing witness. Jane Farrington testified that the testatrix requested her to sign as a witness, that she did so, and that she saw Philip Furlong sign. The evidence is uncontradicted that the testatrix and the two witnesses saw one another sign their names. This witness (Farrington) testified that she heard the testatrix ask Philip Furlong to sign her will, that he did not hear her, and she asked him a second time, and then he came forward and signed it. This was a sufficient publication and a sufficient request for the witnesses to sign. Four witnesses were sworn in respect to the execution of the will, the subscribing witnesses and Mary Ann Murphy and Michael F. Phelan, and none of them gave any testimony which would justify a court in holding that the will was not duly executed, published and witnessed.

Was the testatrix’s will revoked by her subsequent marriage ?

The following are the provisions of the Revised Statutes relating to the powers of married women to devise and bequeath their property as originally enacted, and as now in force :

“Sec. 1. All persons, except idiots, persons of unsound mind, married women and infants, may devise their real estate by a last will and testament, duly executed according to the provisions of this title.” (§ 1, art. 1, tit. 1, chap. 6, part 2, R. S.; 2 R. S. p. 56.)
“Sec. 21. Every male person of the age of eigliteeen years or upwards, and every female, not being a married woman, of the age •of sixteen years or upwards, of sound mind and memory, and no others, may give and bequeath his or her personal estate by will in writing.” (§ 21, art. 2, tit. 1, chap. 6, part 2, R. S.; 2 R. S. p. 60.)
“ Sec. 44. A will executed by an unmarried woman shall be deemed revoked by her subsequent marriage.” (§ 44, art. 3, tit. 1, •chap. 6, part 2, R. S.; 2 R. S. p. 64.)

These provisions remained unchanged until the passage of chapter 375 of the Laws of 1849, which empowered married women to “ devise real and personal property and any interest or estate therein, •and the rents, issues and profits thereof in the same manner and with like effect as if she were unmarried.” By chapter 782 of the Laws of 1867 the Revised Statutes were amended by striking from section 1 above quoted the words “ married women,” so that the section now reads:

“ Sec. 1. All persons, except idiots, persons of unsound mind and infants, may devise their real estate by a last wall and testament duly executed according to the provisions of this title.”

The 21st section above quoted was amended by striking out the words “not being a married woman,” so that the section now reads:

“Sec. 21. Every male person of the age of eighteen years or upwards, and every female of the age of sixteen years or upwards, ■of sound mind and memory, and no others, may give and bequeath his or her personal estate by will in writing.”

It is urged by the learned counsel for the appellant that the words “ in the same manner and with like effect as if she were unmarried,” contained in chapter 375 of the Laws of 1849, are words of limitation, and that the wills of married women under that statute stand in all respects on the same footing as the wills of unmarried women, fall within section 44 above quoted, and are revoked by a subsequent marriage. The answer to this seems to be that, by the amendment of the Revised Statutes in 1867, it is not provided that the wills of married women shall have the same effect only as the wills of unmarried women ; but married women now have the same power to dispose of their property by will as men have. There is no restriction on their power, and the effect of their wills is in no wise limited or restricted.

This brings us to the question whether a will executed by a woman during coverture is revoked by her subsequent marriage. The statute does not so declare, which relates simply to the wills of unmarried women. It is not the duty of the courts to enlarge the effect of statutes by importing into them words and provisions not contained in them.

"We think that the will was rightly admitted to probate by the surrogate, and that his decree should be affirmed, with costs. (Matter of Burton's Will, 4 Misc. Rep. 512 ; S. C., 25 N. Y. Supp. 824.)

Wan Brunt, P. L, and Parker, L, concurred.

Decree affirmed, with costs.


text:
    Richard K. Fox, Plaintiff, v. The Rural Home Company (Limited), Defendant.

      Corporation — accommodation indorsement by it — the burden is upon one who discounts an accommodation note to show power in the corporation to indorse it — the form of the transaction, immaterial — estoppel.
    Corporations organized under the statutes of the State of New York cannot bind the property of the corporation by accommodation indorsements, except such corporations as are organized for the purposes of guaranty and indemnity, and the latter cannot do so unless they receive a valuable consideration for the service.

      In an action upon a promissory note which. was defended by an indorser, a domestic corporation, upon the ground that the indoisement was for accommodation, and that the plaintiff who discounted the note was informed of the character of the indorsement at the time when he discounted it, it appeared that the indorsement was made by the cashier .of the corporation (but no proof was given that he had authority to indorse for accommodation); that at the time of the discount the plaintiff drew his check for the proper amount to the order ■of the corporation, the indorser, and that the check was deposited to its account, and that on the same day its cashier gave checks to another company which covered the amount.

      XLelcL, that the burden was upon the holder of the note to show that the corporation had power to indorse for accommodation, and also that its cashier had power to make the indorsement in question or similar indorsements;
    That the fact that the cashier of the corporation, without.authority, deposited to defendant’s credit the.check given by the plaintiff for the note and then transferred the proceeds o'f the discount to another company b.y the checks of the corporation, was of 'no-more significance than if he had given the money to such company or had- indorsed the check over to it;
    That neither a consideration nor an estoppel could be predicated upon 1ns action.
    Motion by the defendant, The Rural Home Company (Limited), for a new trial upon a case containing exceptions, ordered to be heard at the General Term in the first instance upon the verdict of -a jury rendered by direction of the court after a trial at the New York Circuit on the 21st day of February, 1895.
    This action was begun April 21, 1893, to recover the amount due ■on a promissory note made December 9, 1892, by Arthur G. Gates, whereby he promised to pay IT. II. Warner, or order, $5,000 at the Gallatin National Bank of New York, four months after date, which, December 23, 1892, was indorsed by the payee and by the defendant in the form following: “ The Rural Home Co., Limited, E. C. Stebbins, Cashier.”
    The note was discounted on the same day by the plaintiff, who ■drew his check for the avails, $4,908.33, payable to the order of the Rural Home Company (Limited), which was deposited to the credit of its bank account, and on the same day that company, by its cashier, drew two checks payable to “the order of Win. M. Earl, Treas.,” amounting to $4,908.33. William M. Earl was then the treasurer of the Industrial and Mining Company, to which corporation the checks were paid. When the note fell due it was dishonored and duly protested for non-payment, of which the indorsers had due notice. This action was brought against the -maker and both indorsers; the maker and first indorser did not answer, and the action was continued against the present defendant.
    It is alleged in the complaint, and not denied in the answer, that the defendant is a domestic corporation, but it is not alleged, nor was it proved on the trial, under what statute or for what purpose it was incorporated. As a defense it is alleged that the defendant is an accommodation indorser, which was well known to the plaintiff when'he discounted the note, and that Edward C. Stebbins was without authority to make the indorsement.
    When the note was discounted Edward C. Stebbins told the plaintiff that the money was not for the Rural Home Company (Limited), but was for the Industrial and Mining Company. The Rural Home Company (Limited) did not retain the proceeds of the note, and at the time it was not indebted to the Industrial and Mining Company. Edward C. Stebbins had authority co draw checks and indorse notes taken by defendant in the course of its'business, but there is no evidence that he was authorized to make accommodation indorsements. These facts are undisputed. At the close of the plaintiff’s case the defendant moved to dismiss the complaint on the ground that the corporation was not bound by the indorsement, which was denied and an exception taken, and thereupon a verdict was directed for the plaintiff, and the exceptions were ordered to be heard at the General Term in the first instance.

      Joseph N. Tuttle, for the plaintiff.

      Charles Steele and C. A. de Cersdorff, for the defendant.
   Follett, J.:

It is unfortunate that the record does not disclose under what .statute and for what purpose this defendant, a domestic corporation, was incorporated, for it would have enabled the court to deal with known facts, instead of resting its decision on presumptions. So far as we know no corporations organized under the statutes of this State are authorized to bind the property of their shareholders by accommodation indorsements, except corporations organized under the statutes providing for the incorporation of guaranty and indemnity companies, and we know of no statute authorizing such corporations to make accommodation indorsements without receiving a valuable consideration.

It lias been held that banks organized under the statutes of this State have no such power. (The Bank of Genesee v. The Patchin Bank, 13 N. Y. 309; Farmers & Mechanics' Bank v. Butchers & Drovers' Bank, 16 id. 125, 128; Morford v. The Farmers' Bank of Saratoga County, 26 Barb. 568.)

Manufacturing corporations have no such power. (The Central Bank v. The Empire Stone Dressing Co., 26 Barb. 23; The Bridgeport City Bank v. The Empire Stone Dressing Co., 30 id. 421; The Farmers & Mechanics' Bank v. The Empire Stone Dressing Co., 5 Bosw. 275 ; Wahlig v. The Standard Pump Manufacturing Co., 25 N. Y. St. Repr. 864; Filon v. The Miller Brewing Co., 38 id. 602.) The same rule is held in Massachusetts. (Monument National Bank v. Globe Works, 101 Mass. 57; Davis v. Old Colony Railroad Company, 131 id. 258.) In the latter case it was also held that a railroad liad no such power.

"Warehousing and security companies have no such power. (The National Park Bank v. G. A. M. W. & S. Co., 116 N. Y. 281.) In Connecticut it is held that life insurance companies are without this power. (Ætna National Bank v. Charter Oak Life Insurance Company, 50 Conn. 167.) In California it has been held that turnpike companies have no such power. (Hall v. Auburn Turnpike Co., 27 Cal. 256.) In Pennsylvania it is held that corporations organized to hold real estate, mine for and deal in oil, have no such power. (Culver v. Reno Real Estate Company, 91 Penn. St. 367; 1 Mor. Corp. [2d ed.] §§ 389, 423 et seq.; 4 Thomp. Corp. §§ 5739 et seq.)

The learned counsel for the appellant does not gainsay this rule, but urges that the indorsement was not an accommodation one because the check given by the plaintiff for the avails of the note was payable to the defendant’s order, was indorsed b,y it, and credited to it by the bank where it kept its account. Edward O. Stebbins, defendant’s cashier, was called as a witness by the plaintiff and testified that he told the plaintiff when the note was discounted that the money was not for the defendant, but was for the Industrial and Mining Company,, which was not disputed. On the same day two checks were drawn by defendant’s cashier on the bank where it kept its account for the full amount of the avails of the note, payable to “ the order of ¥m. M. Earl, Treas.,” who was the treasurer of the Industrial and Mining Company. .There is no evidence showing that defendant’s cashier was authorized to bind it by an accommodation indorsement, and it having been shown to be such, which fact the plaintiff knew before taking the note, the burden was on him to show that the defendant had power to make such an indorsement, aud that its cashier was authorized to make this or such indorsements. This burden the plaintiff did not assume, and the evidence is not of a character to authorize the court to presume that the defendant was authorized to make an accommodation indorsement, or that its cashier had power to make such indorsement. The fact that the defendant’s cashier, acting without authority, deposited the avails of the note to defendant’s credit, and on the same day checked it out for the benefit of the Industrial and Mining Company, is of no more significance than though he had taken the money and given it to the latter corporation or had indorsed the plaintiff’s check to that corporation, and neither a consideration nor an estoppel can be predicated upon these facts. (National Bank of Commerce v. Atkinson, 55 Fed. Rep. 465; affd. sub nom., National Bank of Commerce v. First National Bank, 27 U. S. C. C. App. 88.) There being no evidence that the defendant was authorized to bind itself by this indorsement, and no evidence that its cashier "was authorized to make it, and no evidence upon which an estoppel can be based, the plaintiff failed to establish a cause of action, and the defendant’s exceptions should be sustained, the verdict set aside and a new trial granted, with costs to the defendant to abide the event. .

Yan Brunt, P. J., concurred in result.

Exceptions sustained, verdict set aside and new trial granted, with costs to defendant to abide event.


text:
    William S. Williams, Appellant, v. Robert Lindblom, Respondent, Impleaded with Others.

      Assessment of damages — afjvt'mative claim by the defendant — reference — case to be made and settled — testimony to be signed and returned —foreign judgment, may be proved although not pleaded — evidence taken by a master in chancery is not a part of the record — presumption that the same rule prevails in a foreign Stale.

    An assessment of damages is reviewable on the merits only and not upon technical exceptions, and the record should contain the evidence.
    In an action brought by one partner against another for an accounting in regard to partnership transactions the defendant set up an affirmative claim, and thereafter such proceedings were had that judgment absolute was rendered against the plaintiff in the Court of Appeals, and a referee was appointed to take and state an account of the affirmative claim of the defendant; the referee reported in favor of the defendant and a judgment was entered upon the report.

      Held, that, if it was to be regarded as an appeal from a judgment, entered on the report of a referee appointed to hear and determine an action, it was necessary for the plaintiff, if he desired to review the judgment, to make a case and have it settled by the referee in conformity with section 997 of the Code of Civil Procedure;
    That, if it was to be regarded as a reference, other than for the trial of the issues in an action, the testimony should be signed by the witnesses and should accompany the report of the referee, as provided by General Rule No. 30; and the testimony, if not given in full, should present the substance of that which was material.
    Where one partner sues another for an amount alleged to be due him upon partnership transactions, and the defendant sets up a counterclaim and subsequently recovers judgment against the plaintiff in an action brought in another State for an accounting, 1jo which all the partners were parties, the ' defendant need not plead the foreign judgment in bar by supplemental answer, but may use it in his action in the State of New York as evidence of the amount due-him by the plaintiff.
    Such a judgment rendered in another State binds the parties to it in an action brought in the State of New York by one partner to recover of another an amount alleged to be due by reason of the same transactions as those covered by the action in the foreign State.
    Under the practice in the Court of Chancery, the evidence taken by a master in chancery formed no part of the j udgment record, and the courts of the State of New York, in the absence of proof upon this point, will not presume that the rule is otherwise in another State where the chancery practice obtains.
    Appeal from an order entered March 11, 1895, confirming the report of a referee appointed dune 18, 1891, to assess damages, and from the judgment entered March 12, 1895, on said report and order.
    This action was begun January 17,1890, for an accounting between partners, and was referred to a referee to bear and determine. TJpon bis report, a judgment was recovered September 2, 1892, in favor of the plaintiff and against the defendant Bobert Lindblom and Nathan G. Miller for $63,705.16, from which judgment Lindblom appealed to this court, where, March 27, 1893, the judgment was reversed, a new trial granted, and Adrian EL Joline appointed a referee to hear and determine the action. (68 Hun, 173.) May 5, 1893, the plaintiff appealed to the Court of Appeals from the order granting a new trial, giving the stipulation required by subdivision 1 of section 191 of the Code of Civil Procedure. June 5, 1894, the order was affirmed by the Court of Appeals and a judgment absolute rendered against the plaintiff, with costs. (142 N. T. 682.) June 8, 1894, the judgment of the Court of Appeals was made the judgment of the Supreme Court. June 18, 1894, Adrian H. Joline was appointed a referee “to take and state an account upon the affirmative claim of said defendant against plaintiff as upon plaintiff’s default, and to take such evidence and such proceedings herein as may be requisite to render effectual said judgment and report same to this court.” November 2, 1894, the plaintiff moved in the Court of Appeals to be allowed to withdraw his appeal, or for a reargument of the case, which was denied. (143 N. Y. 675.)
    The partnership out of which this litigation arose was formed June 21, 1883, by Bobert Lindblom, Nelson Yan Kirk, Nathan G. Miller and William S. Williams, who entered into a written contract by which they formed a limited partnership under the laws of the State of Illinois, under the firm name of Bobert Lindblom & Co. The partnership was to begin July 1, 1883, and end June 30, 1885. It was provided that the principal office and place of business of the firm should be in Chicago, Ill., and that there should be a branch office in the city of New York. After the termination-of the partnership, and on the 12th of March, 1886, Bobert Lindblom began an equitable action in. the Superior Court of Cook county, Illinois, in which action all of the partners appeared and answered. In this action a trial was had which resulted in a judgment, entered October 24, 1894, which adjudged and decreed, among other things, the-following:
    “It is, therefore, ordered, adjudged and decreed, that the defendants Nathan G-. Miller and William S. Williams pay to the complainant, Robert Lindblom, the sum of twelve thousand four hundred and ten and dollars ($12,410.49) within three days from this date. That the said defendants, Nathan G-. Miller and William S. Williams, pay to Robert Lindblom, as administrator of the estate of Nelson Yan Kirk, deceased, the sum of four thousand one hundred and eighty and dollars ($4,180.99) within three-days from this date.
    “ That the defendant Nathan G. Miller pay to the said William S. Williams the sum of seventeen thousand nine hundred and nine dollars ($17,909.10) within three days from this date. That all such sums so decreed to be paid as aforesaid shall bear lawful interest thereon from this day until paid.
    “ That the costs of this suit to be taxed by the clerk of this court to be paid by the said Nathan G. Miller and William S. Williams-jointly, and in default of the said payments, as herein provided, that execution issue therefor.”
    On the assessment of the damages before the referee in the action at bar this judgment was offered and received in evidence.
    January 22, 1895, the referee reported that Robert Lindblom was entitled to recover against the plaintiff $12,582.72. To this report the plaintiff filed exceptions, which were, March 11, 1895, overniled, the report confirmed, and on the next day a judgment was entered pursuant to said order. ' From this judgment and this order this appeal is taken.

      John Mtorray Mitchell, for the appellant.

      Lmus A. Gould, for the respondent.
   Follett, J.:

The record on which we are asked to reverse the order of the Special Term confirming the referee’s report and the judgment entered thereon is very defective. If, as the appellant insists, we are to review the judgment on the case containing exceptions as on appeal from a judgment entered on a report of a referee appointed to hear .and determine an action, the answer is that a case has not been made and settled by the referee, as provided by section 997 of the Code of Civil Procedure.

“ In references other than for the trial of the issues in an action '* * * the testimony of the witnesses shall be signed by them, ■and the report of the referee shall be filed with the testimony.” (General Pule 30.) The testimony contained in the record does not purport to have been signed by the witnesses, and, besides, the order .confirming the referee’s report, and overruling the exceptions thereto, recites that it was made on the testimony taken,” and other papers not necessary to be referred to here. At pages 190 and 191 of this record it appears that both parties read from the former appeal book a mass of testimony given by witnesses on the trial of the action. None of this evidence is contained in the present record, the substance thereof is not stated, nor is any reason given why it is not contained in the record. An assessment ■of damages is reviewable on the merits only and not on technical ■exceptions, and on a record like the one before us the merits cannot be reviewed. Besides, on appeal from an order the record on which the order was made should be presented to this court, unless .■some part of it is omitted by the sanction of the Special Term. If we could overlook all of these defects and consider this case on the merits, we should find no ground for reversing the order and the judgment. We agree, with the learned referee that the Illinois judgment was binding on the parties, as to the state of the partner•sliip accounts and as to the amount due by and to each partner. When this foreign judgment record was offered in evidence it was objected to by the plaintiff on the grounds: “(1) Not alleged in pleadings; (2) not complete record.” The answer of defendant Lindblom in this action was verified April 2, 1890, more than two years before the recovery of the Illinois judgment, and he was not hound to plead it by a supplemental answer as a bar to this action, hut had the right to use it as evidence of the amount due him so as to recover a judgment in this State for that amount. There is no evidence before us that the exemplified copy is not a true copy of the whole of the judgment record. The clerk of the court in which the judgment was recovered certifies the above and foregoing to be a true, perfect and complete transcript of the record.” In tbe master’s report to tlie court it is recited that the testimony of certain witnesses and certain documentary evidence are “ herewith returned as a part of this report.” This is the omission of which the plaintiff complains. There is nothing to show that the evidence taken by the master in chancery, in an equitable action in Illinois, forms part of a judgment record in the action. Under the practice in the Court of Chancery in this State the evidence returned by the master and referred to in his 'report did not form part of the judgment record, and such is the rule in England, and so we think the plaintiff’s exceptions to the admission of the judgment roll untenable.

It was proper to grant an additional allowance in this action. There had been a trial of the issues of fact, and when the judgment entered upon that trial was reversed, the question of costs was expresssly reserved to abide the final award of costs.

The orders of June 8 and of June 18, 1895, are not appealed from.

An examination of all of the plaintiff’s exceptions leads us to the conclusion that they would be found to be without merit if they had been presented to us on a proper case, and that the result would have been the same as now.

The judgment and order should be affirmed, with costs.

VaN Bkunt, P. J., and Paekee, J., concurred.

Judgment and order affirmed, with costs.