text:
    SAMUEL JONES, Plaintiff and Appellant, v. CARLISLE NORWOOD, Defendant and Respondent.
    In the case at bar, the court at special term, held, on a motion of the defendant, to strike out a portion of the complaint as irrelevant, and to make the same more definite and certain, so as to show whether the defendant was sued as receiver, or individually, that the complaint stated but one cause of action, and that certain allegations were irrelevant, and should be stricken out, and that the defendant should be named in the action as 1 ‘ Receiver of the Lorillard Fire Insurance Company, ” &c.
    On appeal, the general term reversed the order, and held that the court had no power to change the character of the party sued as defendant in the action.

      That the complaint, contained sufficient allegations' to entitle the plaintiff to try the question of defendant’s personal liability for the acts complained of, and therefore the allegations stricken out were pertinent and material, and should not have been stricken out.
    Before Sedgwick Yak Yorst and Speir, JJ.

      Decided April 4, 1874.

      Walter Edwards, Jr., attorney for appellant.

      Hamilton Odell, of counsel.-

      Norwood & QoggesTiall, attorneys for respondent.

      Carlisle Norwood, Jr., of counsel.
   By the Court.—Speir, J.

This is an appeal from an order made at special term, striking out certain portions of the complaint as irrelevant, and compelling the plaintiff to so amend the title of his action in the summons and complaint, and his prayer for judgment, that the action shall be against the defendant as re ceiver of an insolvent insurance company, and no! against him personally.

. The order appears to have been made under the impression that the complaint did not state a cause of action against the defendant personally, and possibly the inartificial manner in which the complaint is drawn, was well calculated to lead to that conclusion. It will be admitted, I think, if the complaint fairly makes out a case against the defendant personally, then there was no ground for changing the character of the action, by substituting one defendant for another ; even admitting the power of the court to do so. But we are of the opinion that the court had not the power to compel the plaintiff to bring his action against the defendant in his official character, and against a specific fund in his hands, and not against him personally for misfeasance. On this motion, the question whether the complaint contains facts sufficient to sustain a c¡ ¡ase of action, is not properly before the court. A part f may strike out a cause of action or defense, by amend ^ient, of course, under section 172 of the code (Watso v. Rushmore, 15 Abb. Pr. 51); but we find no author! ly for substituting one defendant for another, by compulsion. Even if the plaintiff fails to make out Ms case in his complaint, it is at his own peril; and on this motion to strike out the question is, are the expunged allegations in any view pertinent .or material to such a cause of action.

In order to determine whether the allegations in a complaint áre not irrelevant, but material, there must be some cause of action stated in it known to the law. The defendant cannot be held personally liab.le, except for maladministration of his trust, as waste or misapplication of the funds, a conversion of any part thereof, „ or misconduct, amounting to a denial of the rights, or . wrongful withholding of the share of a party interested in the estate. I think there is enough stated in the complaint to entitle the plaintiff to try the question of the defendant’s personal liability in the discharge of his duties as receiver, in taking possession of the assets and effects of the insurance company, and his disposition of them “ in such a manner as he saw fit,” not according to law, “ but according to his own preferences and partialities.”

If "this view be correct, then the allegations wMch have been stricken out, were designed to show bad faith on the part of the defendant, in assigning false reasons for the rejection, or non-payment of the plaintiff’s claim, and in exacting from him proofs and proceedings which were not required of others, to whom payments were made, out of the assets of the company, and in paying any dividends upon claims against the company, not presented and proven, or approved by the referee appointed for that purpose. Concéding then, that a cause of action is stated in the complaint against the defendant personally, it can hardly be said that, the allegations struck out by the order of the learned judge can in no aspect of the case be immaterial or irrelevant.

We think the order should be reversed, with costs.

Sedgwick and Van Vorst, JJ., concurred.


source: Caselaw Access Project

author: By the Court.—Speir, J.

license: Public Domain

text:
    CHARLES E. STRONG, as Receiver, &c., Plaintiff and Respondent, v. THE NEW YORK LAUNDRY MANUFACTURING COMPANY, EVERETT CLAPP and ANDREW GILL, Defendants and Appellants.
    The defense to the note in suit, was that the corporation defendant made, and the defendant Andrew Gill indorsed the same, without any consideration, for the accommodation of the defendant, Everett Clapp, who indorsed and delivered the same to the plaintiff upon a usurious agreement that plaintiff should reserve a greater sum than legal interest, &c., &c., and therefore defendants allege and plead usury, as a defense to the same.
    The maker being a corporation, a question arises upon the construction of the statute of 1850 (Laws of 1850, ch. 172, p. 334), which provides that “ No corporation shall hereafter interpose the defense of usury in any action.”

      Held, by the general term, that the decision in Hungerford Bank ®. Potsdam & Watertown R. R. Co., is in point (10 Abb. Pr. 24).
    In that case the loan was made to the corporation defendant on its note, whereby plaintiff received more than seven per cent, interest. The other deifendants were accommodation indorsers.
    The court held that the contract of the indorsers was independent of that of the maker, and the indorsers, as defendants, could avail themselves of the plea' of usury. In the case at bar, the general term held that the indorsers could in like manner avail themselves of the defense of usury.

      Held also, that the purpose of the act was to prevent the avoidance by a corporation of its own conti'act, for the reason that it was made in contravention of the laws against usury.
    The reversal of this judgment in favor of all the appellants, decides that a corporation might avail itself of a plea of usury against a note made by it for the accommodation of an indorser who indorsed and delivered it to the plaintiff fon a usurious consideration.
    Before Van Vobst and Speir, JJ.

      Decided April 4, 1874.
    Appeal from a jugdment entered in favor of the plaintiffs.

      Sewell & Pierce, attorneys for appellants.

      Robert Sewell, of counsel.

      John L. Qadwalader, for respondent.
   By the Court.—Speir, J.

The action is brought against the defendants as makers and indorsers of a promissory note for three thousand dollars, purchased by the Atlantic National Bank, and which, on its failure, came into the hands of the plaintiff as receiver.

The note was made by the New York Laundry Manufactory Company, a New York corporation, and indorsed by the other defendants in blank, and was purchased by the bank in good faith, believing the same was business paper.

The answer admits the allegations of the complaint, and sets up, first, that the note was an accommodation note, made by the corporation and indorsed by the defendant Grill, for the accommodation of the other defendant Clapp, and that the bank had notice of these facts; and second, that the defendant Clapp delivered and transferred the note and indorsement to the bank at a usurious rate.

The action was tried before Mr. Justice Sedgwick, without a jury, whose findings appear in the case. The defendants except to the conclusions of law that they are liable on the facts found. The judge, upon the facts, decided that the plaintiff is entitled to judgment against all the defendants for the amount of the note. The defendants appeal from the judgment.

The first defense in the answer, that the paper was only accommodation paper, would only be available to the corporation, and the defendant Grill. But the court has found that the purchase was made in good faith, and without notice. The second defense is usury, and is the only question to be considered.

The statute against usury provides that no person or corporation shall take any greater sum for the loan of money that at the rate of seven per centum per annum (§ 2). It also provides (§ 5), that all contracts whatsoever (except respondentia and bottomry bonds), whereupon and whereby there shall be taken or secured a greater rate of interest, shall be void (1 Edm. Rev. .Stat. 725, 726.)

It is well settled that an accommodation note is not a valid instrument, until it is negotiated, and does not acquire validity until delivered to a bona fide holder for a valuable consideration. If the note be delivered or transferred for an illegal consideration, as if it be discounted at a usurious rate of interest, the note is absolutely void."

The statute of 1850 {Laws of 1850, ch. 172, p. 334), is invoked by the plaintiff to save the note from the .consequences of the above legal propositions. The statute provides, “No corporation shall hereafter interpose the defense of usury, in any action.”

It is claimed by the plaintiff, that by the operation of this statute, the defendants are prohibited from assailing the title and control of this note in the plaintiff, on the ground that there was usury in the transaction, by which a title and control were .acquired by the plaintiff. In short, that the defendants are prevented from setting up usury as a defense under the act.

The language of the statute has been very liberally construed in passing under review of the many judicial decisions since its enactment. The courts have been gradually enlarging the meaning of the one word “ defense,” which seems to be the key of legal construction of this simple sentence of the statute. This was done to carry out the policy the legislature had in view, and to avoid the practical absurdities arising chiefly from the different positions of a corporation as party plaintiff, or defendant. These several adjudications, however, had- direct reference to the individual cases decided, depending on the facts presented in each case for adjudication. As the questions of law arising on the facts in this case, do not appear to have received judicial examination, it may be useful briefly to review the decisions heretofore had on the subject.

In the first and leading cases so thoroughly and ably examined by the many learned and distinguished judges then presiding"(Curtis v. Leavitt, 15 N. Y. 151), the precise point decided was, that the prohibition from setting up usury, was retrospective.

In the case of Southern Life & Trust Co. v. Packer, (17 Id. 51), Pratt, J., it was decided that the prohibition from interposing the defense of usury is' riot only retrospective, but applies to foreign corporations litigating in the courts.in this State.

The case of Butterworth v. O’Brien (23 Id. 275, Davies and James, JJ.), decides that the prohibition - deprives the corporation of the right to recover bade-money paid by them in excess of legal interest.

In Rosa v. Butterfield (33 Id. 665), Davis, J., the corporation gave its note, containing a stipulation to pay interest at the rate of twelve per cent, per annum semi-annually. The indorsement on the note guaranteed the payment and collection of the note at all times, and unconditionally to the amount of the principal, and interest at the rate of seven per cent, only.

In an action by the holder of the paper, it was decided that the defense of usury was „ unavailing to the corporation on the loan of money, and also to the guarantors of the note.

The case of Belmont Branch Bank v. Hoge (35 Id. 65), Porter, J., decides that the provisions of the act of 1850 operate pro tanto as a repeal of the statute prohibiting usury, so far as they were applicable to stipulations for a rate of interest exceeding 7 per cent, where a corporation is the borrower.

In Merchants’ Exchange Bank v. Commercial Warehouse Co. (49 Id. 635), Folger, J., the action was brought for the conversion of a quantity of -tobacco, the warehouse receipts for which had been pledged with the defendants as security for loans made to one Oakley by the defendants, which the complaint alleged to be usurious. The court decides that the act of 1850, prohibiting corporations interposing the defense of usury, only prevents the avoidance of its own contract on the ground of usury; that it does not apply to a case where the corporation succeeds to the rights of the party who might avail himself of the provisions of the usury laws.

In Hungerford Bank v. Potsdam & Watertown R. R. Co. (10 Abb. Pr. 24), the loan was made by the plaintiffs to the defendants on their note, whereby the plaintiffs received more than seven per cent, per annum. The other defendants were accommodation indorsers. The general term of the fifth district held that the contract of the indorsers was independent of that of the maker, and the loan having been made with the maker, the indorsers, as defendants, could avail themselves of the plea of usury.. Mr. Justice Mason, at the special term (9 Abb. Pr. 124), had held in the same case that contracts of corporations were no longer invalidated by usury ; and that an accommodation indorser for a corporation upon a usurious note, could not set up his defense to invalidate his contract. This decision was reversed by the general term.

The facts in the case under consideration resemble more nearly those in the last case than any I have examined, and I think must be disposed upon the same legal principles. ; The ground is that the purpose of the act was to prevent the avoidance by a corporation of its own contract, for the reason that it was made in contravention of the laws against usury, that the contracts of makers and indorsers of promissory notes, are treated in law, as they are in fact, as separate and several contracts. These contracts may or may not be supported by the same consideration. The validity of the contract' of indorsement-does not necessarily depend upon the validity of the engagement of the maker; and it does not follow because one is in a situation to allege the illegality, the other shall be precluded.

The defendant Clapp is in no sense a stranger to the contract of loan, so as to preclude him from setting up the defense of usury, when sued upon his indorsement ; or from seeking affirmative relief by action on the ground of usury. He was a party to, and executed it with the plaintiff. The defendants Clapp and Gill are certainly not strangers to their own contract of indorsement. They, and they only, can allege the invalidity of their contract (Dix v. Van Wyck, 2 Hill, 522; Green v. Moore, 4 Barb. 332). They are not joint contractors with the maker. The contract of the one is conditional, while the other is absolute. Each party may be severally estopped by his own acts from setting up a defense, true in fact, and common to both, and which would be fatal, while the other party may avail himself of it (McKnight v. Wheeler, 6 Hill, 492; Holmes v. Williams, 10 Paige, 326).

The making of the note* by the incorporation, and the transfer of it to the indorsers, are not affected by the act of 1850. There is nothing on the face of the note, or in the transfer of it. to the indorsers, which can be said to be usurious. It had no legal inception until it was delivered to the bank by the defendant, Clapp. Ho liability attached to any of the defendants until the note became operative in the hands of the bank, when the transaction between the defendant Clapp and the bank was completed. That transaction was usurious. It was considered as settled law, prior to the passage of the act of 1850, that the discount or purchase of an indorsed note, having no previous legal inception or validity, at a greater rate of interest than seven per cent, made the note void for usury.

Bosworth j., in Belmont Branch Bank v. Hoge, supra, says, “The contract of an accommodation indorser is his own contract alone, and not that of his principal. The separate contract of the accommodation indorser, or other' surety, whether contemporaneous with or subsequent to that made by his principal, may be void, as contravening the usury law ; while that of his principal is valid, as not reserving more than seven per cent, or by favor of some act making it legal, though a greater interest was received.” Mr. Justice Mason admits in.his opinion in (9 Abd. Pr. 124) “that if the accommodation indorsers are to be deemed borrowers from the plaintiff, and to have an independent contract with the plaintiffs, or if they are to be held as actual parties to the contract of loan, then they could interpose the defense of usury.

The plaintiff cites the case: of Eosa ®. Butterfield, as an authority that defendants would have been liable if they had indorsed a guaranty on the note, making themselves sureties, and not indorsers, claiming that the obligation of an indorser rests upon the same foundation, except that he is a conditional surety.' This does not seem to meet the point. In the case relied upon, the corporation’s own note or contract was, by itself, impugned as vicious for usury in it, and the security on which the usurious loan was based, was infected with a vice that destroyed the whole transaction, while in this case, the corporation note was free from any such taint.

In the latest decision on this subject, the learned justice (Folger) (Merchants’ Exchange FT. Bank v. Com. Warehouse Co., supra.), “says there are doubtless ' expressions in some of the cases which convey the idea of a legislative intention in passing the act to repeal the usury laws, so,farc as corporations are concerned. But the force of reasoning in them as a whole, and the leaning of the facts therein, are to the result that the purpose of the act was to prevent the avoidance by a corporation of its own contract of the laws against usury.” And again : “ The facts of the cases, and the questions raised in them, did not carry the binding force of these authorities further than to the refusal to the corporation of the benefit of the usury laws, when its own contract was for usury in it, by itself, impugned as vicious.”

To say that the indorsers are privies to the note made by the maker, and are therefore liable, does not meet the question. For the maker of this note has done nothing whereby the statute has any application whatever. It does not apply to a contract, unless it be such that the defense of usury could be interposed under it. In short, it must be a contract made by the corporation, usurious by itself, and which the corporation, or parties privy to the usury by which it is infected, cannot avoid, independently of the statute, either by defense or attack. Any other construction would make the act applicable to all classes other than the corporation, however innocent the latter might be of any act or intention of violating the usury laws.

We think the judgment must be reversed, a new trial ordered, with costs to the appelant, to abide the event.

Van Vorst, J., concurred.


author: By the Coubt.—Howell, Ch. J.

text:
    JAMES J. BOSS and WILLIE M. ROSS, Plaintiffs and Respondents, v. JOHN COMBES, Defendant and Appellant.
    I. Reference of issues compulsory.
    1. What, not referable.

      a. An action to recover damages for the breach of a contract, is not.
    1. If such a cause of action is joined with a cause of action which is referable, neither of the causes of action can be referred, at least, not until after the non-referable cause of action has been disposed of by a jury, when possibly, the referable cause of action may be sent to a referee (See Evans v. Kalbfleisch, 36 IV. 7. 8upr. Ot. JR.).

    2. Appealability of order granting a reference.

    1. It is always appealable, for the power of the court to make the order is always involved.
    Before Monell, Ch. J., Curtis and Speir, JJ. -

      Decided May 2, 1874.
    Appeal by defendant from an order directing a reference to hear and determine all the issues.
    The action was upon a contract for the sale and delivery of a quantity of peaches, to be shipped and delivered by the plaintiff to the defendant, at a stipulated price.
    The complaint alleged a delivery of part and payment therefor, and then, “ that subsequently the plaintiffs delivered certain other of the peach crop sold to the defendant, of which a particular account is annexed to their complaint; that the defendant is indebted to the plaintiffs for the quantities so delivered, together with thirty-nine hundred and two crates (that were furnished by plaintiffs over and above the one thousand which the plaintiffs agreed to furnish free of charge), in the sum of thirteen thousand and forty dollars and eighty-two cents, and that no part thereof has been paid except the sum of eight thousand four hundred and eighty-five dollars and ninety cents, .for which sum credit is given to defendant in the said account, and the balance thereof remains still due and unpaid, to wit: the sum of four thousand five hundred and fifty-four dollars and ninety-two cents.”
    The complaint then further alleged as follows: “And for a further, separate, and distinct cause of action, the said plaintiffs allege the making of the agreement hereinbefore set forth ; that the peaches delivered by them to the defendant as aforesaid, constituted only a part of their said growing crops that were purchased by the said defendant in and by his said agreement; that the plaintiffs were ready, and offered on their part to perform their said contract to deliver the residue thereof, but that the defendant refused to take the same, and neglected to provide cars to transfer the same, and directed plaintiffs not to pick the same, by reason whereof a large portion of said crops purchased as aforesaid by the defendant, to wit: ten thousand baskets full, were left upon the trees and perished, which were of the value of ten thousand dollars.”
    The schedule of items annexed to the complaint consisted of about forty different shipments of peaches, running through a period of about thirty days, with some six credits of payments.
    The denials in the- defendant’s answer will require the plaintiff to make proof on the trial of each of the causes of action alleged in the complaint. .
    The plaintiffs moved for a reference upon the usual affidavit, and upon the pleadings.
    The motion was opposed by the defendant, but granted by the court. The defendant appeals.

      Arthur McDaniel, attorney, and of counsel for appellant, urged:—I.
    The order is appealable. (1.) The general term was designed not only for the redress of legal errors occurring at the special terms, circuits or jury terms, and before referees, but those of fact likewise ; and they were also designed to redress wrongs arising from an erroneous, arbitrary or otherwise improper discretion by the former courts (Matter of Duff, 10 Abb. Pr. N. S. 416, Court of Appeals, citing People v. N. Y. Central R. R. Co., 29 N. Y. 318, and explaining De Barante v. Deyermand, 41 Id. 355, and Foot v. Lathrop, Id. 358). (2.) The right of a trial in the mode and by the tribunal prescribed by law is a substantial right, and does not rest in the discretion of the court and where there is no competent evid ence upon which the court below could have decided that the trial would involve the examination of a long account, the court of appeals will review the decision (Kain v. Delano, 11 Abb. Pr. N. S. 35, Court of Appeals ; Gregory v. Cryder, 10 Id. 289, Court of Appeals; Welsh v. Darragh, 52 N. Y. 590).
    II. The order should be reversed. (1.) The party moving for a reference must show how, and what way, the examination, of a long account will become necessary upon the trial; and where there is only a general statement in an affidavit, “that the trial of the issues joined will require the examination of a long accountwithout stating how, or why, this is so, it must be considered a mere opinion (Kain v. Delano, 11 Abb. Pr. N. S. 35, Court of Appeals). (2.) The statute does not authorize a compulsory reference unless the accounts are the direct and immediate object of the suit, or the ground of defense, and not merely collaterally or incidentally involved (Kain v. Delano, 11 Abb. Pr. N. S. 36, 37, Court of Appeals, citing Code, § 271; Laws of 1801, ch. 90, § 2; 1 K. &R. 347 ; Todd v. Hobson, 3 Johns. Cas. 518). 3. A referee is only required to possess the skill necessary to examine a long account; and the fact that referees may possess skill and experience equal to a justice of the court does not alter the theory and object of the statute, to leave litigation to the determination of ordinary tribunals created for that purpose, unless there is a special necessity for the use of others (Goodyear v. Brooks, 2 Abb. Pr. N. S. 304, General Term of N. Y. Superior CourtX 4. The object of the,statute was to relieve the court of the tedious examination and investigation of long accounts ; but the delay in trials before referees, the referées’ fees, the increased counsel fees, may often work a wrong, or be so oppressive upon one or the other of the parties, as to be almost a denial of justice, and in all such cases the court should not order a reference merely because its convenience or time may be disturbed (Godfrey v. Williamsburgh City Fire Ins. Co., 12 Abb. Pr. N. S. 250, Feb. 1872, Superior Court, Special Term, Moweli,, J.). 5. .Where a complaint contains two separate causes of action, one of which may, upon trial, require the examination of a long account, and the other one will not, upon trial, require the examination of any account, the statute does not authorize a compulsory reference to hear and determine all the issues in the action.
    III. The order should be reversed. ' The constitution secures to the parties in this action a trial by jury, in this and similar cases (Const, of N. Y. art. 1, § 2; Townsend v. Hendrickson, 40 How. Pr. 143 ; Kain v. Delano, 11 Abb. Pr. N. S. 35 ; McKeon v. See, 51 N. S. 304; Colman v. Dixon, 50 Id. 574, citing Davis v. Morris, 36 Id. 569; Barlow v. Scott, 24 A. 7. 40, and Hudson v. Caryl, 44 Id. 553; Gleason v. Ketelas, 17 Id. 498; Heywood v. City of Buffalo, 14 Id. 534; Wynehamer v. People, 13 Id. 378, 457, 458; Cruger v. Hudson R. R. Co., 12 Id. 190, 198.

      Beach & Beman, attorneys ; and Henry D. Beman, of counsel for respondents, urged :—I.
    In an action in which the court has power to order a reference, no appeal lies from such order (Ubsdell v. Root, 3 Abb. 143 ; Kennedy v. Shilton, 9 Id. 157; Dean v. Empire Mutual Insurance Co. 9 How. 69). II. If there is any evidence laid before the court at special term that an examination of a long account will be required, the court has power to refer ; and if that evidence is uncontradicted, then the determination must be held final and conclusive (Whitaker v. Desfosse, 7 Bosw. 682 ; Bachelor v. Albany Ins. Co., 6 Abb. N. S. 240). V. The court of appeals will not review the decision when the court below has decided this question upon competent evidence (Kain v. Delano, 11 Abb. N. S. 35).
    II. The order is right upon the merits. _ I. The light to refer actions on contract, where the trial will involve the examination of a long account, is not within the limitations of the constitution in reference to trial by jury (Townsend v. Hendricks, Court of Appeals, 40 How. 162).
    III. This is an action on contract, and the pleadings, as well as the affidavit, show that a long account is involved.
    IY. This case is within the ruling of the court of appeals, in Welsh v. Darragh, 52 N. Y. 592.

      Y. The rulings in Kain ?j. Delano, 11 Abb. A. 8. 34, .do not conflict with the decision in this case.
   By the Coubt.—Howell, Ch. J.

It is objected that this order is not appealable. That the action being upon contraed, and the issues requiring the examination of an account, the order was discretionary, and that therefore, as there was no question of the power, of the court to order the reference, under the uniform decisions of the courts, an appeal from the order does not lie. In the decisions referred to, the appealability of the order was ascertained by determining whether it was within the power of the court to make it. If it was wholly discretionary, it was final, but if the action, or the case made on the motion was not within the statute, the order was subject to review.

Those decisions, however, must be regarded as reversed by subsequent adjudications in the court of appeals, (Townsend v. Hendricks, 40 How. Hr. 162; Kain v. Delano, 11 Abb. N. S. 35 ; Welsh v. Darragh, 52 N. Y. 592), where it is held in substance, that the question of power is always involved in these motions. The court say, that in any case a reference can be ordered only when' the examination of a long account is required, and the power of the court is to be found in that fact. If the proof before the special term does not show that the account is such as brings the action or trial within the statute, the court has no power to make the reference, and if it is made, the decision may be reviewed (Kain v. Delano, supra).

It was further objected that a reference of the issues was an infringement of the constitutional right of trial by jury.

The language of, the bill of rights (Cons. art. 1, subd. 2), is, “the trial by jury in all cases, in which it has been heretofore used shall remain inviolate, &c.” In a literal sense, this would include any common law action, as well actions of assumpsit involving the examination of long accounts, as actions of tort. For the former action, at all times, might be tried by á jury; and, therefore, it might be claimed, that it was a case in which a trial by jury “has been heretofore used.” But as actions involving the examination of long accounts were referable before the adoption of any of the constitutions of this State, the clause quoted from the bill of rights has been confined by construction to such common law actions as were theretofore tried by a jury only.

This question, however, is fully disposed of by Townsend v. Hendricks (supra).

The complaint in this case contains a statement of two separate and distinct causes of action. The first cause of action is for goods sold and delivered; and from the number of items furnished by the bill of particulars, may involve, on the trial, the examination of a long account, within the meaning of the statute. The second cause of action is, the breach of a special contract, and for the recovery of unliquidated damages.

In Evans v. Kalbfleisch (36 Supr. Cf. R.), this court, upon a review of the recent adjudications in the court of appeals, held that the several decisions of this court (Whitaker v. Desfosse, 7 Bosw. 678; Goodyear v. Brooks, 4 Robt. 682, and Batchelor v. Albany City Ins. Co., 1 Sweeny, 346), holding that if any of the issues required the examination of a long account, the entire action was referable, notwithstanding some one or more of the issues were such as the parties had the constitutional right of trial by jury, must be regarded as reversed by such recent adjudications. The court say, “The principle to be deduced from the decisions referred to is, that all the causes of action stated in the complaint must be referable. If part or one only is referable, the court cannot refer the others.” In such case the party must either abandon his non-referable cause of action, or, possibly, after it is disposed of by a jury, the other cause of action may be sent to a reference.

The second cause of action, as stated in the complaint, is non-referable. It is to recover unliquidated damages for a breach of contract, and, standing by itself, the court could not make a comp.ulsory reference. And this court says, in Wheeler v. Falconer, 7 Robt. 45, “The Code, by expressly permitting, even where a long account is involved, the referee to be confined to passing upon a- specific question of fact involved in the issue, and by allowing an account to be taken as a separate matter, for the information of the court, not only authorized but required that neither party should be deprived of the benefit of a trial before a court or a jury as to matters not in-olved in the account.”

The right to unite in the same complaint several causes of action should, as far as is practicable, be confined to such actions as may be tried together and in the same forum. This can only be done by sending all the issues to a jury, if any of them are within the constitutional inhibition, and by refusing to send any to a reference.

Following, therefore, the decision of this court in Evans v. Kalbfleisch (supra), the court had no power to refer the issues in this case, and hence the order of reference should be reversed, with costs.

Curtis and Speir, JJ., concurred.


author: By the Court.—Monell, Ch. J.

text:
    THE CENTRAL NATIONAL BANK, Plaintiff and Appellant, v. LEONARD D. WHITE AND OTHERS, DEFENDANTS AND RESPONDENTS.
    I. Discovert oe books and papers.
    1. PracticaVsubstitute for.

    1. When production of books can be compelled by subpoena duces tecum,, the provision of the Code allowing the examination of parties to the action has practically become a substitute for the mode of discovery prescribed by the Revised Statutes.
    But

      a. This practical substitute does not obtain in cases of corporations, for they cannot be compelled to produce their books by a subpoena duces tecum.

    3. What not an answer to an application for a discovery by a corporation.

    1. It is no answer that the books contain entries which the corporation claims to home been falsely and deceptively made by one of its officers (who is a defaulter in respect of the transactions evidenced by said entries, and who has absconded) which entries, if unexplained, would exonerate the applicant for discovery from liability, and which can only be explained by the testimony of such officer, and that the discovery sought was of such false and deceptive entries, when the applicant had in his dealing with the officer a right to assume that he was acting under the authority of the corporation.
    H. Corporation.—Subpoena duces tecum.
    1. A corporation cannot be compelled, through the medium of a subpoena duces tecum, to produce its books.
    Before Monell, Ch. J., Curtis and Speir, JJ.

      Decided May 2, 1874.
    • Appeal by plaintiff from an order for discovery of books.
    The action is for money received by the defendant to the use of the plaintiff.

      The complaint alleges six separate canses of action. They are identical, expept in time and amount.
    The first is as follows:
    “ And the plaintiffs say, upon information and belief, that on or about May 18, 1868, the said defendants received the sum of six thousand dollars, the money of the plaintiffs, to the use of the plaintiffs, and they say that the said defendants have not repaid the same, nor any part thereof, and that the said de-. fendants are therefore indebted to the plaintiffs in said sum of six thousand dollars, with interest from May 18, 1868.”
    The answer, after a general denial, averred as follows:
    “And for a further and separate.defense, the said defendants allege that that they received from William H. Sanford several sums of money as security for services to be rendered, and responsibility to be incurred by them.
    “Thatthe defendants performed services, and incurred responsibility upon the security of the said several sums, and sustained loss upon the responsibility so incurred to an amount exceeding the sums so received by them, which sums herein mentioned are the same mentioned in the said complaint.”
    The defendants moved for a discovery of the plaintiff’s books.
    The petition for the discovery alleged that William H. Sanford was a former cashier of the plaintiffs, and who, as the plaintiffs aver, while acting as such cashier, wrongfully and dishonestly received and appropriated to his own use, money and other property belonging to and in the possession of the plaintiff to a large amount, and that the moneys so paid by him to the defendants were a portion of the moneys so wrongfully received and appropriated by him.
    The petition then alleges “that all the moneys paid by said Sanford to your petitioners as security, as in their said answer stated, were paid by checks drawn by said Sanford upon the plaintiff, and that said checks were all paid by the plaintiff upon presentation, and your petitioners verily believe, and therefore aver, that the said plaintiff, that is to say. its president and director, or some of them, were well informed of the drawing and payment of said checks, as above alleged, and that the same were paid from time to time with their knowledge and assent.
    “ Tour petitioners further show, that the said plaintiff has in its possession, or under its control various books of record and account, which contains various entries relating to the said checks and the payment thereof by plaintiff, that is to say: ”
    Then follows a list of several books, and the petition concludes with the usual allegations.
    The plaintiffs, in answer to the petition allege, that “ Sanford, their cashier, absconded in July, 1869. That certain of the books and accounts, of which a discovery was sought, were kept under the immediate direction of Sanford, and contained his original entries.”
    “ That it was discovered that Sanford was a defaulter to a large amount, which defalcation had been concealed by false entries in said books and accounts.”
    The plaintiffs then alleged ££ that the delivery by said Sanford to defendants of plaintiffs’ said moneys, was, so far as is known, effected by his drawing in his official capacity as cashier, a regular cashier’s check upon plaintiffs, in favor' of defendants, for each sum of said moneys. That defendants took such cashier’s checks from said Sanford, indorsed the same, drew the plaintiffs’ money thereon, and applied it to pay said Sanford’s indebtedness to them for said losses in gold and stocks, and that Sanford thereupon, in every instance, concealed and covered up his said misappropriation of said moneys by means of said false and deceptive entries, as hereinbefore stated. And deponent says, that the discovery and inspection which defendants now seek, is a discovery of said false and deceptive entries, except so far as their application relates to the cashier’s checks themselves, and the said Sanford’s individual account, and his checks drawn against the same, which last plaintiffs have been at all times ready and willing to produce and discover.”
    But the plaintiffs say that they believe it is not possible for them to prove by competent evidence the said false and defective entries, unless they shall be able to call, “ and shall call ’ ’ said Sanford to prove the same. And they are advised that it would be contrary to justice to compel them to discover such false and deceptive entries when the proof of their falsity can be obtained only by the evidence of said Sanford.
    The motion was granted, and the plaintiffs were ordered to make discovery as follows :

      First. Copies of checks drawn upon the plaintiff by William H. Sanford, individually, during the years 1867, 1868 and 1869, and list of all checks drawn upon said plaintiff during the said years by William H. Sanford, as cashier of the plaintiff, and which were paid by Sanford to the defendants, or which are made, payable to the order of the defendants, or bear the defendant’s indorsement or stamp, the list to furnish the numbers, dates, amounts, names of payees and indorsers of said checks respectively.

      Second. Copies .of the stubs of the checks so drawn by the cashier of the plaintiff upon the plaintiff during the years 1867, 1868 and 1869, to the order of the defendants, or which bear their indorsement or stamp.

      Third. Copies of any entry or entries of or relating to the amount or date, or date of payment by the plaintiff, of any or either of the checks hereinbefore referred to as having been paid by William H. Sanford to defendants, contained in the plaintiff’s cashier’s check-book or books, and third teller’s ledger or ledgers.
      Fourth. A copy of the individual account of Sanford with the plaintiff during the years 1867, 1868 and 1869, as contained in the ledgers of the plaintiff.

      Fifth. A copy of the account and the several items thereof, for the years 1867, 1868 and 1869, known as or called the cashier’s account, as contained in the ledgers of the plaintiff.

      Sixth. A copy of any entry or entries in the book or books of minutes of the proceedings of the board of directors of the plaintiff, during the years 1867, 1868 and 1869, relating in any manner to said Sanford.
    The plaintiffs appealed.

      Martin & Smith, attorneys, and Aug. F. Smith, of counsel for appellant, urged :—I.
    A discovery is not a matter of strict right, but rests in discretion (Code, § 388 ; 2 Ren. Stat. 199, § 21; Bowne v. Cribb, 20 Wend. 682).
    II. The court will not grant a discovery, where the discovery will tend to deceive (See Van Zandt v. Cobb, 12 How. Pr. 544). This court has said, “It (a discovery) could not be exercised for inequitable purposes, or to create or promote litigation ” (Wood v. De Figaniere, 1 Robt. 681, 686 ; see also, Bailey v. Dean, 5 Barb. 297 ; Abery v. Williams, 1 Vern. 27).
    III. It would be inequitable to give to these defendants a discovery of the credit side of the cashier’s account, composed of fraudulent entries, made by or under the direction of Sanford, the cashier, when it appears that these defendants took from the cashier checks signed by him, as cashier, to make good to themselves losses by stock speculations, when they knew, from the fact that the checks were cashier’s checks, that they were taking the money of the bank. To give such a discovery is, in substance, to give to confederates in the wrong of the cashier, power to use the false entries made by their confederate, as the evidence to complete, and carry out, a fraud begun bythe delivery and acceptance of the cashier’s checks.
    IV. The order should be modified so as to exclude the credit side of the cashier’s account from the discovery, and also such entries in other books as were carried to such credit side.

      Edwards & Odell, attorneys, and Hamilton Odell, of counsel for respondents, urged:—I.
    It is not denied that this account contains evidence relating to the merits of the defense herein. Mor that such evidence is material, and will (at least) tend to establish that defense. Mor that the account is in the possession of the plaintiffs. Mor that the evidence which it contains cannot be procured except by a discovery of the account. Under such circumstances a discovery is matter of right (Hoyt v. American Ex. Bk., 1 Duer, 652 ; Lefferts v. Brampton, 24 How. Pr.258; Union Co. v. Metropolitan Co., 3 Daly, 171 ; Case v. Banta, 9 Bosw. 595). Or, if regarded as discretionary, the discretion will be exercised in favor of the petitioners, not only for the reasons above stated, but also as matter of common justice, inasmuch as the controversy is between individuals on the one hand and a corporation on the other. For the defendants may be examined before trial. And upon such examination they may be compelled, by subpoena duces tecum, to produce and exhibit their books, papers and accounts (Central Nat. Bk. v. Arthur, 3 Sweeny, 144). But there can be no examination of the corporation, or of its officers, before trial (Goodyear v. Rubber Co., 48 Barb. 522). Mor can its books be brought into court, at any stage of the case, by subpoena (La Farge v. La Farge Ins. Co., 6 Duer, 680 ; Bank of Utica v. Hillard, 5 Cow. 419). Mor can other parties obtain access to them—or inspection óf them—except by this proceeding for a discovery.
    II. The plaintiffs object to the discovery asked for, because they say—(1.) Their books are unreliable— untruthful—full of false and fraudulent entries. (2.) That such entries cannot be proven to be false and fraudulent except by the testimony of one man, whom they are unwilling to call, because they are unwilling to trust him as a witness. As presented in the affidavit of Mr. Coles, Judge Sedgwick properly treated all this as the mere opinion of a man who had “no original knowledge” of the matters to which he assumed to testify. But assuming it to be1 strictly true, it affords no answer to the motion. (1.) It was the plaintiffs’ duty to see that their books were kept correctly. (2.) These false entries were made from time to time, through a period of two years and upwards. (3.) It is fairly inferable from the affidavit of Mr. Coles, that during all that time no examination was made by plaintiffs of “said books, and of Ms (Sanford’s) account with the bank.” (4.) It is not pretended that the discovery of these false entries was attended with •any difficulty whatever. It might have been made at any time before had not the plaintiffs been guilty of gross neglect of duty. (5.) The defendants are "in no way connected with the alleged falsification of the books, and are not to be held responsible for, or made to suffer on account of, the plaintiff’ neglect. (6.) The only answer which is admissible to an application of this sort is a denial of the possession or control of the books, &c., of which discovery is sought (Southart v. Dwight, 2 Sandf. 672; Hoyt v. American Exchange Bank, 1 Duer, 652).
    III. A denial of this petition will amount to an exclusion of the evidence which the plaintiffs’ books contain. If it is pertinent and material to the defendants’ case, they are entitled to have it (Morrison v. Sturges, 26 How. Pr. .178). If for any reason it is incompetent, that objection should be made and decided at the trial, when the merits of the whole case are put before the court.
   By the Court.—Monell, Ch. J.

There has been a strict compliance with the statute and rules of court in the statements contained in the defendants’ moving papers; and the application is brought within the usual principles governing the discovery of books and papers.

In cases where the production of books can be compelled by subpoena duces tecum, the provision of the Code allowing the examination of parties to the action has practically become a substitute for the mode prescribed by the Revised Statutes.

But an action by or against a corporation is not among the cases where a subpoena duces tecum would be effectual to compel the corporation to bring its books into court (La Farge v. La Farge Ins. Co., 14 How. Pr. 26).

The only defense to this motion is that it is inequitable and unjust to compel the plaintiffs to discover the books kept by their defaulting, cashier, containing entries of false and deceptive credits, which, if unexplained, will exonerate the defendants from liability, and which cannot be explained except by the testimony of such cashier.

It is necessary in these applications that the books of which a discovery is demanded contain material evidence, which cannot be obtained in any other way, and those are the governing tests. If the demand is by a plaintiff, it must appear that the evidence will prove or aid in proving his cause of action ; if by a defendant, it must go in support of his defense. In either case, if the evidence is material, it must necessarily, to a greater or less degree, be detrimental to the adverse party; and it could, therefore, be always urged that a party ought not to be required to furnish his adversary with the weapons of attack or defense, especially as it would throw upon such party the necessity of explaining, or relieving himself from the effect of such evidence.

But I cannot perceive that any principle of equity or justice is violated by adhering to the common rules which control these applications. Discoveries of the nature sought in this case are quite usual. The evidence contained in the plaintiffs’ books "is material to the defendants ; and it is no answer to the application to say thaf the books contain entries which the plaintiffs can only explain by the testimony of their cashier.

The defendants, dealing with the plaintiffs, had a right to assume that the cashier was acting.under the plaintiffs’ authority; and, therefore, the entry of any of the transactions was the act of the plaintiffs. Upon that assumption, the entries are competent as evidence in the defendants’ favor, and unexplained, they are material. Of course, if, as was suggested, the good faith of the defendants is successfully impugned, these assumptions cannot prevail.

The inequity, if any exists in this case, grows out of the alleged difficulty in explaining the entries of the defaulting cashier. But that is a difficulty that surrounds more or less every case, and must be looked upon as a misfortune, and not as affording a reason for defeating the established right of a party.

An exception cannot be made in favor of a corporation. If it was competent to require the production of their books by a subpoena duces tecum, their contents relating to the transactions between these parties might be received as proper evidence against the plaintiffs. But as such production cannot be compelled in that way, resort must be had to an order for their discovery ; but the order will have no greater or other effect than to bring the evidence within the reach of the party seeking it. Its competency, sufficiency or materiality are questions afterwards to be disposed of.

I think the order should be affirmed, with costs.

Cuetis and Speir, JJ., concurred.


author: By the Court.—Mokell, Ch. J.

text:
    ALONZO DUTCH, Plaintiff and Respondent, v. JOHN HARRISON, Defendant and ApPELLANT.
    I. Contract, what sufficient to constitute.—Public policy.
    1. What sufficient to constitute.

      a. Where A., being about to put in a proposal and estimate for the work and materials to be done and furnished in and about the erection of a public school house by the board of education, B. being present, asked him .what his estimate for the roofing work was, and in being informed, told A. he would do it for a certain sum, thereupon A. told B., that if he would make the estimate, and agree to do it for that price, that he (A.) would alter his estimate, and accept B.’s, as his, B.’s, was some four or five hundred dollars lower. B. wrote it on a card, and A. then tore up his estimate, and made up another one at four or five hundred-dollars lower. The contract was awarded to A., who thereupon told B. that he had based the roofing estimate on’his (B.’s) estimate, and he should expect him (B.) to do the job, and B. said he would do it.
    Held,

      a good and valid contract by B. to do the roofing work at the named price in the event of A.’s obtaining the contract for the erection of the building.
    1. There is both mutuality in, and sufficient consideration for, the contract.
    3. Public policy.

    1. Such a contract is not void, as being against public policy.
    H. Usage.—Custom.—When evidence of not admissible.
    1. Evidence of an usage in the trade not to consider an estimate given binding, or of an usage to have a separate and distinct contract made for all work done, or of an usage as to the eSect given to estimates, is not admissible to alter or limit the legal effect of contracts.

    1. Therefore, not admissible in the case at bar.
    Before Moneul, Oh. J., Curtis and Speir, JJ.

      Decided May 2, 1874.
    Appeal by defendant from judgment entered on the verdict of a jury.
    The complaint alleged that in February, 1872, the defendant entered into a contract by which he agreed to do the trimming, cornice-work, copper gutters, tin-leaders, slatting towers, patent ventilators, tin roofing, and the other trimming work, and to furnish the material therefor, then and thereafter to be done and furnished on a public school house, then about to be erected in the city of New York, for the sum of nineteen hundred dollars, that the plaintiff had the contract therefor, and- the plaintiff agreed to pay the defendant said sum for the work so to be done and the materials so to be furnished by the defendant.
    That plaintiff requested the defendant to perform said contract on his part, and the defendant then and-there refused to and ever since has refused to* perform the same, and that in consequence thereof the plaintiff was obliged to and did employ another to do the said work and furnish the material therefor, at an increased cost to the plaintiff of five hundred and eighty dollars, over and above the sum for which the defendant agreed to do and furnish the same, to the plaintiff’s damage of five hundred and eighty dollars, with interest thereon from August 20, 1872.
    The answ-er was a general denial.
    The action was tried by the court and a jury.

      The plaintiff testified, that estimates had been invited for building a school house, for the carpenter’s work of which, he had estimated.
    “I had my estimate prepared and ready to deposit in the box, and as I entered the office, Mr. Harrison stepped up to me, and asked me if I had a roofer’s bill on & it; I told him I had ; he marked his figures on a piece of paper, he said, 6 Will it beat that V I asked him if that was his estimate. He told me it was. I told him that if he would make an estimate and agree to do it for that price, that I would alter my estimate, and accept his, as it was some four or five hundred dollars below my former estimate. He wrote me it on that card. I then tore my estimate and made up another one at four or five hundred dollars lower. We then waited at the office where the committee was. Mr. Harrison was there all the time while the committee was in session. They all left, the committee, after the announcement had been made, excepting Mr. Harrison and myself.

      “ I got the work, and told the defendant that I had based the roofing estimate on his, and that I should expect him to do the job. He said he would do it; that he would go and get his plans, and go to work.” The defendant afterwards refused to do the work, and the plaintiff had to procure others to do it.
    All the material portions of this testimony were contradicted by the defendant. He said:
    “I had no conversation : I simply was there ; I had given estimates to two other carpenters, and had made out estimates for Mr. Doyle ; I did not know Mr. Dutch only by sight; didn’t know him to speak to him even ; he came up to me and asked me if I had any objection to give him my figures ; I told him no ; that is all that occurred ; I had nothing more to say to him at all.” The difference between the defendant’s estimate for the roofing, and the sum it actually cost the plaintiff, was six hundred and thirty-three dollars and seventy-four" cents.
    Several questions put to witness by the defendant’s counsel, were excluded by the court, and the defendant excepted.
    They were as follows :
    “Q. What is the usage in regard to estimates ; are they considered binding?
    (Objected to.)
    “By the trade ?
    (Objected to.)
    “ Q. I will add to the question—Do the trade consider an estimate given binding, or is it the usage to have a separate and distinct contract made for all work done ?
    “ Q. I ask you as far as the usage and custom of the trade is concerned what was the effect of it ?
    “ Q. State, if you know the usage and custom of your trade about giving estimates for work, and the effect given to those estimates ? ”
    The court charged the jury that if the plaintiff, in pursuance of the notice from the board of education, put in his proposal to do this rooting work for a certain sum, and before the proposals were opened the defendant asked him what his .proposal was, and was informed, and then told him, substantially, that if he would withdraw it and put in another for a less sum (mentioning the sum) that he (the defendant) would himself do the work for him for that sum, and the plaintiff accepted the offer and acted upon it, it was a good contract, and the defendant would be bound by such an undertaking.
    (To which the defendant excepted.)
    That if the jury believed the statement of the plaintiff it amounts to an agreement, the defendant agreeing that if plaintiff would withdraw his proposal and put in another that he would do the work for the price mentioned in the substituted proposal, and then if afterwards plaintiff called upon defendant to do the .work it was his duty to fulfill the contract.
    To this the defendant excepted.
    The jury found for the plaintiff.
    The defendant appealed from the judgment entered on the verdict.

      James M. Smith, attorney and counsel for appellant. —I.
    The contract was not binding on the defendant. The plaintiff at the time of the transaction between himself and defendant had no right to contract for the reason that he had no contract with the superintendent-H the plaintiff had not received the contract from the superintendent, the.defendant could not have recovered damages of him for not awarding it to him.
    II. If plaintiff had received it he would not have been legally bound to give it to defendant. The agreement was without consideration (Burnet v. Bisco, 4 Johns. 236 ; Ford v. Adams, 3 Bard. 249 ; Convers v. Kellogg, 7 Bard. 590). (a.) The defendant had a legal right to put in his bid. If lowest he would have been entitled to the contract (Utica & Syracuse R. R. Co. v. Brinkerhoff, 31 Wend., 139; Ingraham v. Gilbert, 30 Bard., 151; Winchell v. Latham, 6 Cow., .682 ; Lester v. Jewett, 12 Bard. 502). (b.) Non-performance of a promise m ade without consideration is not a cause of action, notwithstanding the plaintiff may have sustained special damage (Thorne v. Deas, 4 Johns. 84).
    ÍII. The pretended contract or agreement was against public policy. The combination between plaintiff and defendant, as alleged by plaintiff, was in derogation of the rights "of the superintendent of common schools. He advertised for proposals that he might avail himself of the lowest bidder. The plaintiff attempted to defeat that arrangement by ascertaining if there were lower bids than his own. His conduct was a deliberate and contemplated fraud, such a fraud as the law does not recognize (Thompson v. Davies, 13 Johns. 115; Comp. 396, 6 Term Rep. 642; Harvey v. Leggell, 7 N. Y. 176; Gray v. Hook, 4 N. Y. 449 ; Brisbane v. Adams, 3 N. Y. 129).
    IY. The evidence of the plaintiff does not make out any legal contract, (a.) There was nothing said about payment, and nothing said about security. It cannot be presumed the contract was complete,, unless terms were specified. When was he to be paid 1 How was he to be paid %

    Y. The evidence as to. usage was proper, and should have been allowed.

      J). M. Porter and L. B. Gould, attorneys, and of counsel for respondent, urged :—I.
    That the question whether there was a binding agreement between the plaintiff and defendant in respect to that estimate, was submitted to the jury upon conflicting testimony, and their verdict is conclusive (Murphy v. Baker, 3 Robt. 1).

    II. The defendant’s attempt to prove that by custom a roofer’s estimate was not considered binding, was properly overruled (Sipperly v. Stewart, 50 Barb. 62; Wadsworth v. Alcott, 6 N. Y. [2 Seld.] 64).
   By the Court.—Mokell, Ch. J.

The testimony of the plaintiff was sufficient to authorize the assumption that the defendant agreed with the plaintiff that if the latter obtained the contract for the school building the defendant would, for a named price, do the roofing of the building.

In-accordance with such offer, the plaintiff reduced the amount of his estimate, and was awarded the contract. Upon being informed of that, the defendant said he would do the work.

I do not see why this evidence does not establish a valid contract. The jury have found the facts upon somewhat conflicting evidence, and we must assume that the contract was as testified to by the plaintiff.

First. It had the element of mutuality. The defendant was to do the work, and the plaintiff was to pay the stipulated sum. Had the defendant performed, he could have recovered, as upon an express promise to pay; and such right grew out of his own obligation to perform, and which obligation inured to the plaintiff.

Second. There was a sufficient consideration. There was both a benefit and a possible injury to the plaintiff —a benefit in being able to, successfully bid for the contract, and a possible pecuniary injury if the defendant failed to perform.

Either of these elements—certainly the concurrence of both—made this a valid contract.

It was not a" contract against public policy. The defendant was not a competitor for the building contract. His proposal was to the plaintiff, and not to the school commissioners, and had not and could not, have had any influence upon other bids, and it did not in any way interfere with the general competition for the contract.

Under an estimate, reduced in amount by the de- • fendant’s proposal, the plaintiff became bound to perform his contract with the school commissioners ; and I can see no good reason, in law or morals, why the defendant should be absolved from his agreement or saved from his default.

The several questions which were excluded were properly overruled. They called for proof of customs and usages, which, if they exist, cannot be allowed to alter or limit the legal effect of contracts.

In the view we have taken, there was no error in the charge, and the verdict should be sustained.

Judgment affirmed.

Curtis and Speir, JJ., concurred.


author: By the Coubt.—Moheix, Ch. J.

text:
    ALEXANDER DOWDNEY, Plaintiff and Respondent, v. HENRY VOLKENING, Defendant and Appellant.
    I. Bum OB' PABTICULAKS.
    1. When order for, not necessary.

      a. When the action or defense is on an “ account.”
    1. Account, definition of, in this connection, a. It means the entry of debts and credits, in a book or upon paper, of things bought and sold; of services performed ; with date, and price or value. It may be of a single entry, or of a great number, or for a short or long period.
    1. A bill of particulars of such an account may be obtained on a mere demand. An order is only necessary where the bill furnished in pursuance of the demand is insufficient.
    2. When order necessary.

      1. In all cases where the action or defense is not upon an account, as abone defined.

    1. Consequently, if a plaintiff desires a bill of particulars of damages, alleged in the defendant’s answer to have been sustained by him by plaintiff’s breach of contract, he must apply to the court for an order therefor.
    1. Defendant is not bound to furnish a bill of particulars of such damages, on a mere demand.

    3. Demand made in an improper case.

    1. Remedy of party affected thereby.

      A motion at special term to strike it out is proper.
    Before Monell, Ch. J., Curtis and Speir, JJ.

      Decided May 2, 1874.
    Appeal from an order.
    The action is to recover upon a special contract a stipulated price for excavating and removing rock and earth from the defendant’s property.

      The defendant, for a first defense, made a general denial.
    For a second defense, the defendant alleged that in the month of August, 1872, an agreement was made between the plaintiff and' defendant, whieh was not reduced to writing, whereby the ■ plaintiff agreed to excavate the rock and earth from eight full lots of land owned by the said defendant. That by such contract such excavation was to be made of the uniform depth of ten feet below the curb of Fourth-avenue, and to extend the whole depth of one hundred feet from the front to the rear of the lots, and that the said plaintiff was to remove all the said excavations of the said rock and earth out of and from the said lots, together with all the rubbish of every description, except that the plaintiff was to leave a sufficient quantity of good, useful, • suitable and well trimmed stones from said excavated rock to make the foundation walls of eight first-class houses, to be erected by this defendant upon the said lots. And that it was also provided by the said agreement, that the plaintiff should entirely finish and complete said contract, and complete such excavation and removal, and in all thinfis perform his said contract by January 1, 1874, and that the defendant was by the said contract, upon the same being fully completed according to the terms thereof, to pay to the plaintiff therefor the sum of five thousand five hundred dollars, which sum the plaintiff agreed to do the work above mentioned for, according to the terms of the contract. That the plaintiff has failed to perform the agreement on his part. That he has not excavated the rock and earth from the said eight lots to an uniform dépth of ten feet below the curb of Fourth-avenue, that he has not removed the rock and earth therefrom, according to the contract, that he has failed to leave upon the premises a sufficient' quantity of well trimmed stone to build foundations for said houses, although there was plenty of stone- there. That the plaintiff has left a large amount of rock and dirt on the lots. By reason of which failure of the plaintiff to perform said contract, the defendant has sustained damages to the amount of five thousand dollars, for which he demands judgment.
    The plaintiff replied to the answer, taking issue upon the allegations therein.'
    The plaintiff then served upon the defendant’s attorney the following notice:

      “Sir-: Please take notice that the defendant is hereby required to serve upon me a bill of particulars of the damages claimed to have been sustained by him herein, and set up as at counter-claim in his answer herein.’*
    The defendant moved at the special term for “an order striking out the plaintiff’s demand of defendant of a bill of particulars.”
    The motion was denied, and the defendant appealed.

      Nelson Smith, attorney, and of counsel for appellant, urged:—I.
    The court erred in denying defendant’s motion to set aside plaintiff’s demand for a bill of particulars. 1. By the Code, § 158, a party may, when an account is alleged in adverse pleading, demand a bill of particulars, and the adverse party is obliged to serve it, under penalty of being precluded from giving evidence thereof at the trial. 2. In all cases the court may order a bill of particulars to be furnished by either party. 3. hfo account is alleged in defendant’s answer. There are various definitions of an “account.” Bouvier defines it to be “the statement of two. merchants or others, who have dealt together, showing the debits and credits between them.” Webster says it is “a statement of' debts and credits in pecuniary transactions, and also of other things, subject to a reckoning or review, as to keep one's ‘account’ at the ‘bank.’ ” Worcester terms it “A register of debts and credits, or of receipts and expenditures, a computation applied to sums of money.” Clearly, defendant’s answer does not aver an account. 4. In moving to set aside the plaintiff’s demand for a bill of particulars, defendant pursued the proper course. He was in this embarrassing situation: if, acting under the advice that plaintiff had no right to demand a bill 'of particulars, he served none, and upon the trial the court should hold that he ought to have served one, he would incur the heavy penalty of being precluded from giving any evidence of his damages (Code, § 168). The question is purely one of practice, and is at some time ,or other to be decided by the court. Preliminary questions, and questions of practice, should be brought up on motion prior to the trial (Clark v. Fitch, 2 Wend. 459; People v. Denison, 17 Id. 312 ; Daniels v. Patterson, 3 Comst. 47; Union Bank v. Torry, 5 Duer, 626). Among the different kinds of irregularities one is where any proceedings are had which are not warranted by the particular circumstances of the case, according to the practice of the court, or for which there is no foundation (Burrill's Pr. vol. 1, p. 473 ; De Peyster v. Warne, 2 Cai. 45). The remedy in such a case is to apply to the court to have the proceeding set aside (Burrill's Pr. vol. 1, 472 ; Harris v. Mason, 10 Wend. 568).

      Alex. Thain, attorney, and of counsel for respondent.
   By the Coubt.—Moheix, Ch. J.

The Code (section 158) provides two modes of obtaining a bill of particulars, each, however, applicable to a distinct class of cases. The first relates to an action upon an account, and the second to a claim of a party in all other actions.

In the first class of actions it was not necessary to set forth in a pleading “ the items of an account therein alleged,” but the adverse party may demand, by a notice in writing, a copy of the account. If the account is not furnished, the party may be precluded from giving evidence thereof.

If the account furnished is defective, the court may order a “further account.”

The Code has not extended the right to a bill of particulars, to other actions than those in which it could formerly be obtained. Under the former practice, as partly regulated by the statute, the court had the power to order a bill in nearly, if not every, species of actions. It was not confined to the action of assumpsit, but in-included debt and covenant. So in actions ex delicto, such as trover (Humphry v. Cottleyou, 4 Cow., 54), escape, trespass de bonis asportatis, case for negligence, and the like (1 Burrill Pr. 430). And by statute, in action of ejectment (2 Ben. Stat. 341, § 16).

The only essential change made by the Code, is in the manner of obtaining the bill, in a class of cases.

In all cases, under the former practice and statute, an order of the court was required (1 Burrill Pr. 430).

How, in actions when the items of an account are not set out in a pleading, they may be obtained by a mere demand in writing.

In all other cases, an order must be procured.

In prescribing a difierent mode of obtaining the bill, 'in certain cases, the codifiers must have intended to give to the word “account” some definite and separate meaning. So that the items of an account could be obtained by a mere written demand, and without an order.

The most usual cases for bills of particulars before the Code, were actions of assumpsit, for work and labor ; goods sold and delivered, and the like. In such cases the declaration was general. And although the court could, as we have seen, order a bill in other actions, it was in all cases wholly discretionary, and never a matter of right.

The items of work and labor, and of goods sold and delivered, were frequently numerous, and ran through a large period; and there was more need for the particulars, both as to time and amount of such items, than in other actions; and it had become a matter of course to order the bill in all such cases.

The word “ account,” in its comprehensive, sense, of course, signifies many things; but in its mercantile sense, and I may say its legal sense as applied to actions, it means the entry of debts and credits in a book"or upon paper; of things bought and sold, of services performed, with date, and price or value. It may be of a single entry or of a great number, and for a short or long period.

In the sense, therefore, that’an “account” is the aggregate items of charges, more or less, for services rendered or goods sold, it is tó be presumed that the codifiers intended to confine its meaning to the class of cases in which, theretofore, it was most usual, as well as most necessary, that the particulars of the demand or account should be furnished. For unless some such limitation is put upon it, not only can the word, by construction, be extended to.the “ account” given in a pleading of the facts constituting a caus'e of action or defense; but it. would as well render the latter part of the section purposeless and meaningless.

• Unless, therefore, the action is upon or for the recovery of such an account, as,, it seems to me, must have been intended by the codifiers, namely,' an account containing one or more items for work, labor, services, goods sold, and the like, a bill of particulars cannot be obtained by a mere demand in writing.

In the view I. have, taken, therefore, the plain tiff could not obtain a bill of the particulars of the “ damages” set up as a counter-claim in the defendant’s answer.

The damages were for the breach of a special contract, and were unliquidated; and there could not be any items of an account, within the meaning I have endeavored to show was intended in the Code.

If I am correct, then, as the plaintiff could not procure a bill of particulars by a mere demand in writing, it follows, that the demand made in this case was a nullity.

Notwithstanding that, however, the question is presented by this appeal, whether a party can rest securely upon the invalidity of the demand ; or whether he must not himself move to have the demand declared a nullity, as was done in this case.

The Code provides, as a penalty for neglecting or refusing to furnish a bill of particulars, after demand, when the pleading does not set forth the items of an account, that the party “5e precluded from giving evidence thereof.”

When or in what manner he is to be precluded is not stated. It may no doubt be done, on motion, at the special term. May it not also be done at the trial %

In Kellogg v. Paine, 8 How. Pr. 339, the practice was stated to be unsettled, but it was regarded as the better or more convenient practice to have the question settled before the trial, for the reason that “it might operate as a surprise upon the party to meet an objection to the sufficiency of his account for the first time at the trial.”' The former practice required the order precluding the evidence to be obtained before trial (Graham Pr. 519). *

As the defendant claims that he is not bound to furnish a bill of particulars in this case at all, upon the mere demand of the party, and without an order of the court, he had the right to have that question settled before the trial, and Ms motion to set aside the demand was therefore regular and proper. And as the plaintiff’s practice is not sanctioned by the Code, the defendant’s motion ought to have prevailed at the special term, and the defendant required to procure an order under the last part of section 158 of the Code.

The order appealed from should be reversed, with costs.


author: By the Court.—Curtis, J.

text:
    CHARLES N, BLACK, Trustee of Benjamin M. Hartshorne, Plaintiff and Appellant, v. SAMUEL B. WHITE, Dependant and Respondent.
    T. Trial by jury.
    1. Waiver of, by proceeding with trial.

    1. Where a party proceeds with the trial before the court, without a jury, without demanding that the trial be had before a jury,' and claiming his right thereto,'he waives such right.

      a. Where a complaint is based on the theory that the cause of action therein set forth is one of equitable jurisdiction, and the demand is for equitable relief, but the complaint contains allegations of fact sufficient, if proved, to entitle the plaintiff torecover in an action at law, the defendant, by proceeding with the trial before the court, without a jury, without objection, and claiming a right to a trial by jury, waives ■his right to insist, at the close of the evidence, that, no equitable cause of action having been established, the complaint must be dismissed, although it contains allegations of fact, which, having been established, entitles the plaintiff to recover in an action at law, on the ground that as to the legal cause of action he is entitled to a trial by jury.
    1. Duty of the court under such circumstances. .. See post.

    II. Trial by court, without a jury.- No demand bob a jury TRIAL, OB OBJECTION TO PROCEEDING WITHOUT A JURY, BEING MADE.
    1. Complaint based on the theory of an equitable came of action, but containing allegations of fact sufficient to constitute a legal came of action.

      a. Duty oe the court on determining that no equitable
    CAUSE OE ACTION HAS BEEN ESTABLISHED. THIS DUTY IS, Either to transfer the cause to the calendar for jury trial; Or to strike it off from the equity calendar;

      Or to proceed and dispose of it as a common law action. 1. This latter, although it may in some respects be necessary to conform the pleadings to proof provided such confirmation does not substantially change the claim or defense.
    5. Dismissal oe complaint under such circumstances is ERRONEOUS.

      Decided May 2, 1874.
    Before Mohell, Oh. J., Curtis and Speir, JJ. .
    Appeal by plaintiff from judgment entered on a decision rendered on a trial by the court without a jury.
    On July 22, 1871, the firms of Hartshorne & Brand, maltsters, and Hartshorne & Co., brewers, executed general assignments for the benefit of their creditors, to Samuel B. White, the defendant. He was a large creditor, and the father of Frank S. White, a partner in the firm of Hartshorne & Co. The assignee undertook to carry on the business through the agency of members of the firm of Hartshorne & Co., for the benefit of the creditors of the two 'firms. The brother of Hartshorne, who was a member of each firm, desiring to aid in the payment of the debts, placed in the plaintiff’s possession ten thousand dollars, to be advanced by him, for the purpose of aiding in carrying on their business. The plaintiff thus testified, as to the arrangement made with the defendant:

      “ Q. Did you ever see the defendant in reference to advancing ten thousand dollars, for the purpose of carrying on this business ; if. so, state what occurred 1

    “A. I did ; I saw him after 1 received the money from Mr. Hartshorne'; I went to the bank for that express purpose one morning, and I told him that Mr. Benjamin Hartshorne had given me this money; I told him that the understanding was, that the money was to be handed over by me, provided the money itself, and the interest on it, was paid back to me after it was used in the manufacture of malt, or when I saw fit to demand it; that I would give the money with his assent to these men, Edward M. Hartshorne, Frank S. White and Alexander Brand, to buy malt with in Ontario county, at their malt house, in Phelps ; it was understood that the amount of capital would be about sufficient to pur- • chase about malt enough; but as I understood it, it would be hardly enough, and I tbld Mr. White, as he was a large creditor, and as his son was in the concern, he ought to advance a similar sum ; I told him the more capital he had the sooner they would be able to pay their debts ; that the object of Benjamin M. Hartshorne, in giving me this money, was to aid them ip paying their debts; he did not want any profit from it, but the profit I told him, if any was made, would go to the payment of the debts; Mr. White said he would not advance any money, but he would do this, he suggested they owed him more than ten thousand dollars, and that he would allow ten thousand dollars of his debt to stand, so that in the general distribution of the assets in paying off the debts, he would not apply any of the proceeds to the payment of the ten thousand dollars due him ; I told him with that understanding, that he would pay back this money when we wanted it, principal and interest, I would go on advancing.
    “Q. (By the Court.) You said to him, if he, Mr. White, would pay it back %

      “A. I stated to Mm, he must pay it back.
    “ Q. {By the Court.) Hot they, but he ?
    “ A. Oh, no ! he ; he-was to pay it back ; he asked me when I was leaving the bank whether I would not deposit the money in the Grocers’ Bank; I told him Mr. Hartshorne had paid the ten thousand dollars to me.”
    The plaintiff advanced the ten thousand dollars in pursuance with this arrangement, and it appears to have been successfully employed in the business, for the purpose for which .it was advanced, for several months, when the assignee, the defendant, sold the brewery, and the plaintiff then demanded the payment of the ten thousand dollars, and interest, from him. He refused, and this action was brought, the complaint alleging substantially the above matters, and also that the defendant held this sum in trust, and had employed it for the purpose of the trust, and demanding an accounting, and judgment for the sum and interest.
    At the trial at special term without a jury, the court dismissed the complaint, without prejudice to plaintiff’s right to bring another action at law. •

      Chas. It. Black, attorney, and Geo. M. Rea, of counsel for appellant, urged among other things:—I.
    The proof sustains the complaint. There is no variance. The defendant does not allege that he has been misled. Hence, there is no material variance (Code, § 169). He was, therefore, apprised of the facts by the complaint, and even if he had been entitled to a trial by a- jury, he waived it by proceeding with the trial. He should have objected and demanded a jury before proceeding with the trial (McKeon v. See, 51 N. Y. 301; Greason v. Keteltas, 17 Id. 491, 498).
    II. The distinction between actions at law and suits in equity is abolished (Code, § 69), and the complaint need oMy contain facts constituting a cause of action, and a demand of the relief to which the plaintiff supposes himself entitled (Code, § 142). The complaint should not have been dismissed (Emery n. Pease, 20 N. Y. 62, 64 ; Barlow v. Scott, 24 Id. 40, 45; Phillips v. Gorham, 17 Id. 270, 274, 275),
    III. The most that could have been said as error was that the case was on the wrong calendar, or irregularly on the calendar, which the court could and would have corrected on motion. The defendant, therefore, had a perfect remedy, of which he should have availed himself. The complai nt should not have been dismissed for a mere irregularity.

      Samuel O. Adams, attorney, and together with J. M. Ouiteau, of counsel for respondent, urged among other things.—I.
    The plaintiff cannot maintain this form of action. He claims equitable relief—the facts show simply a money demand. Ho trust was created by the agreement between the plaintiff and defendant. In Craig v. Hyde, 24 How. Pr. 313, it was held, that where a party claims equitable relief, and the facts show a money demand, the complaint must be dismissed. See also, to same effect, Towle v. Jones, 1 Robt. 87 ; Ryder v. Jenny, 2 Id. 56; Durant v. Gardner, 10 Abb. Pr. 445). The complaint was properly dismissed, and the judgment and order appealed from should be affirmed, with costs.
   By the Court.—Curtis, J.

Two grounds are stated by the defendant as the reasons on which the dismissal proceeded. First, that the plaintiff failed to prove any cause of action. What is indicated in the statement of facts as proved at the trial, is a sufficient answer to a motion to dismiss on that ground. As the case shows that the court granted ‘the motion to dismiss, “without prejudice to the right of the plaintiff to bring another action at law” it may be inferred, and it was by the defendant secondly claimed, that it was dismissed, because the evidence failed to show that the plaintiff was entitled to equitable relief, and that the defendant had been entitled to a trial by jury.

Though something is stated on the plaintiff’s points, in reference to the repayment of this money being dependent upon the vicissitudes of trade, and that the defendant did not agree to return the money at all events, nothing appears in the pleadings or evidence, showing that the contract with the defendant was otherwise than that he should repay the principal sum and interest on demand. If the case showed that the plaintiff’ s right to a repayment depended upon what might be disclosed upon an accounting as to the profits of the business conducted by the defendant, that would be a proper subject for the exercise of an equitable jurisdiction.

As the case appears, the plaintiff has a clear right to recover upon a money demand, and the defendant was entitled, under the State constitution, to a trial by jury, provided he had not waived it. But he proceeded with the trial without objection, which is clearly a waiver of his right. If he did not intend to waive it, he should before proceeding with the trial have demanded a jury, and objected on this ground.

It is too late to take the objection, when the trial has been proceeded with, and he has omitted to object, or to call the attention of the court to his claim to a jury trial (Greason v. Keteltas, 17 N. Y., 498; McKeon v. See, 51 N. Y. 301).

But if the defendant had duly shown his right to a jury trial, it would have been a good reason for a direction by the court that the action should be transferred to the calendar for jury trials, or struck off from the calendar upon which it had been irregularly placed, but not a sufficient reason that the complaint should be dismissed ; or the court could have disposed of it as a common law action, conforming the pleadings to the facts proved, when such amendment does not change substantially the claim or defense” (Code, § 173).

Either of these courses was open to the court, and would have been more in accordance with the practice in such cases, than a dismissal of the complaint.

A new trial is granted, so that the case may go back to be tried, with costs to -appellant to abide the event.

Monell, Ch. J., and Speer, J., concurred.


text:
    ALEXANDER KINCAID, Plaintiff and Respondent, v. WILLIAM H. DWINELLE, Dependant and Appellant.
    I. CORPORATION—DISSOLUTION—STOCKHOLDER.
    1. Dissolution, what does not operate as. a. The appointment of a receiver, under section 86, article 2, title 4, chapter 8, part 3, Revised Statutes, with the powers conferred hy chapter 71, Laws of 1852, and chapter 463, Laws of 1860, does not.

    RESULT OF THIS:

      That notwithstanding such appointment and an accompanying injunction,

    1. The company could still be sued as a corporation.

    2. The summons in an action against the corporation may be served on the person who at that time was the president of the company, and whose term of office' had not expired by effluxion of time, and who had not-resigned at the time of service.
    3. Those who' were then stockholders did not thereby cease to be such.
    4. The statute of limitation, in the Laws of 1848, chapter 40, section 24, does not commence to run at such time.
    5. A recovery may be had in an action commenced more than two years thereafter, against one who at that time was liable as a stockholder, under the provisions of section 14 of the act of 1848, for a clebt of the company, the judgment against the company for such debt having been obtained in an action commenced thereafter, by the service of the summons on the person who was at that time president, and whose term of office had not expired by effluxion of time, and who had not resigned at the time of service.
    Before Monell, Ch. J., Curtis and Speik, JJ.

      Decided May 2, 1874.
    Appeal by defendant from a judgment entered on a decision made in a trial by the court, without a jury.
    The New York Silk Manufacturing Company was duly organized as a corporation, under the laws of the State. On December 11, 1866, one Douglas recovered a judgment against said company for work, labor and services performed by him for - said company, as superintendent and employee. An execution was issued on such judgment against the property of said company, and was returned unsatisfied. Douglas thereafter sold and assigned his claim against said company and defendant herein, and the said judgment, to the plaintiff. Thereupon the plaintiff, pursuant to section 18 of the act of 1848, relating to the liability of stockholders of corporations for debts due and owing to their laborers, servants and apprentices, for services performed for such corporation, brought this action against the defendant, a stockholder in said company, to recover the amount of said claim of Douglas.
    This action was commenced in April, 1872, and was tried by the court, without a jury.
    On the trial, it appeared, that one Jason Crane having obtained a judgment against the company, and having issued an execution thereon, which had been returned unsatisfied, commenced an action against the company, pursuant to sections 36 and 37 of article 2, title 4, chapter 8, part 3, Revised Statutes.

    In that action a receiver was duly appointed, pursuant to the above provisions of the Revised Statutes, and with the powers and duties thereby given and conferred, and also with the powers conferred by Laws of 1852, ch. 71, and Laws of 1860, ch. 463. Such appointment was made on April 24,1866, and the receiver duly qualified on or prior to that day.
    It did not appear whether there had been any final decree or judgment in that action or not.
    Judgment was recovered herein against the defendant, who appeals.

      Haseall & Stetson, attorneys, and Francis Lynde Stetson, of counsel for appellant, urged :—I.
    In consequence of the proceedings in the action of Crane v. Hew York Silk Manufacturing Company, and of the order appointing a receiver, the corporation was dissolved and ceased to exist from and after the day upon which the receiver qualified, to wit, April 23, 1866. The learned justice below rejected this proposition, and the court is now asked to review the question both upon its own merits, and in the light of authority. The life of the corporation was derived from the people, as expressed through the legislative will. “ Being the mere creature of law, it possessed only those properties which the charter of its creation con-. ferred upon it” (Ch. J. Marshall, 4 Wheat. 636). These properties were (Laws of 1848, ch. 40), the right to represent, under a common name, the joint interests of several individuals. The right, under its name, “of taking and granting property, of contracting obligations, of suing and being sued” (1 Kyd on Gory. 13). The possession of these properties constituting the very being of the corporation, a withdrawal, by legal process, of all of these rights, would necessarily destroy the corporation (Slee v. Bloom, 19 Johns. 474 ; 2 Kyd on Corp. 467; In the matter of Berry, 26 Barb. 61).
    II. The appointment of a receiver under § 36, art. 2, tit. 4, ch. 8, p. 3, Rev. Stat. with the powers conferred by the amendments of 1852 and 1862, operates as a dissolution of a corporation (Act. of 1825, ch. 325 ; 2 Rev. Stat. 369, 463 ; Laws of 1852, ch. 71; Laws of 1860, ch. 403; Mann v. Pentz, 2 Sandf. Ch. 257-261; 3 Comst. 415; Verplanck v. Mercantile Ins. Co., 2 Paige, 452; Mickle v. Rochester City Bank, 11 Id. 118 ; Angelí v. Silsbury, 19 How. Pr. 51; Puller v. Webster Pire Ins. Co., 12 Barb. 293 ; Bangs v. McIntosh. 23 Id. 591).
    III. The cases of Bank of Niagara v. Johnson, 8 Wend. 645; People v. Manhattan Co., 9 Id. 351 ; Michels v. Rochester City Bank, 11 Paige, 118, and In the Matter of Reformed Presbyterian Church, 7 How. Pr. 477, are not in conflict with above decisions. They merely hold that a corporation cannot (except, perhaps, where it expires by effluxion of time), be dissolved without some judicial proceeding; but they do not undertake to determine what judicial proceedings will be sufficient for the purpose.
    IV. The New York Silk Manufacturing Company having been dissolved in April, 1866, the plaintiff’s action, commenced in April, 1872, was barred by the statute, and should have been dismissed (As to limitation, see Laws of 1848, ch. 40, § 24). It cannot be claimed that one can, in any sense contemplated by the statute, be a stockholder of a corporation after it is dissolved, and consequently the two years limited by the statute for the bringing of actions against stockholders who shall cease to be stockholders, would expire in two years from the date of .such dissolution.
    V. The corporation, being dissolved in April, 1866, could not afterwards be sued ; the only suit against the company for the collection of the debt covered by the present action was brought in November, 1866 ; consequently the complaint in the present action should have been dismissed upon the ground "that, as .a matter of law, the necessary preliminary suit had never been brought (Laws of 1848, ch. 40, § 24).
    VI. In any event the preliminary judgment by default was irregular, and insufficient to form the basis of an action against a stockholder, the summons having-been served in November, 1866, upon Louis S. Bobbins, as president of the company, which was then in the hands of a receiver. When the summons was then served upon the (assumed) president, he was under injunction not to pay out or transfer any of the moneys, property or effects of the company. Such a service, considered as a notice to the defendant, was idle.

      It. C. Elliott, attorney, and of counsel for respondent, urged:—I.
    The corporation was not dissolved by the appointment of the receiver (Lea v. Amer. Att. & Pacific Canal Co., 3 Abb. Pr. N. S. 1; Abb. Dig. of Laws of Corp. p. 290-291, and cases cited; Angell v. Silsbury, 19 How. Pr. 48; Michels v. Rochester City Bank, 11 Paige Ch. 118 ; Nimmons v. Tappan, 2 Sweeney, 652 ; Mann v. Pentz, 3 N. Y. 415; Dambman v. Empire Mills, 12 Barb. 345).

    II. A final order or decree should be entered to work a dissolution (Bank of Buffalo, 6 Paige, 503).
    III. The order of sequestration can be dissolved, and corporation allowed to resume (lb. ; Ferry v. Bank of Central N. Y., 15 How. Pr. 458 ; Angel v. Sillsbury, 19 Id. 48).
    IV. If the corporation was in such a condition that it could not be sued, defendant was responsible, without proof of any action brought against the corporation (52 Mo. 583 ; 8 Am. Law R. 561).
   By the Court.—Speir, J.

The appellant contends, that a receiver having been duly appointed in the suit by Jason Crane against the corporation, the corporation was ipso facto dissolved, and ceased to exist from and after the day such receiver qualified.

As the judgment recovered by Douglas, the.plaintifFs assignee, appears to have been regularly obtained on the face of the papers put in evidence, the only question is whether the appointment of the receiver in the above suit by Crane dissolved the corporation.

At common law, the only adverse legal proceedings was by scire facias, by which a chartered corporation could be completely gnd finally annulled and annihilated . It seems a judgment of seizure in a quo warranto information, or proceedings against the franchises of a corporation, either by charter or proscription, did not operate to dissolve a corporation, but only to suspend its operation during the pleasure of the crown (Grant on Corp. 295, 301).

In this State there has been one uniform course of decisions on the subject, the tenor of which is that the legal existence of a corporation cannot be attacked collatterally, but only by judicial proceedings and judgment of ouster. •

Although the powers conferred on the receiver in this case, by the order of this court appointing him, restrains the corporation from exercising its powers, and using its franchises, making its officers subordinate to the will and action of the receiver, by delivering to him all its assets, books and papers; still its legal existence continues, ¿and any creditor is at liberty to proceed against it, in its corporate capacity. The reason is very plain. The object of the receiver’s appointment, and the ends sought to. be attained thereby, may be accomplished, and all proceedings instituted by him settled and discontinued, without involving the consideration of any question whatever which might arise in any action instituted directly for the purpose of dissolving the corporation (The People v. The President of the Manhattan Company, 9 Wend. 351. In the matter of the Reformed Presbyterian Church of New York, 7 How. Pr. 476 ; Mickles v. The Rochester City Bank, 11 Page, 125).

In this court (Nimmons v. Tappan, 2 Sweeny, 652), it was held that corporations are not dissolved by insolvency, or non-user. These are grounds for judically declaring them dissolved, and in the N. Y. Marble Iron Works v. Smith, 4 Duer, 362, Oakley, Ch. J., says a corporation can only be dissolved by a surrender of its charter, accepted by this State, or by judicial proceedings instituted for that purpose. No corporation can be dissolved by a mere resolution of its directors, stockholders, or members ; not even when all the members concur in the act (See also Shellington v. Howland, 53 N. Y. 371).

The judgment must be affirmed, with costs to the defendant.

Monell, Ch. J., and Curtis, J., concurred.


text:
    MAX MINZESHEIMER, Plaintiff and Applellant, v. THE CONTINENTAL INSURANCE COMPANY, Defendant and Respondent.
    Insurance—Clause against the use op spirit gas.
    1. Waiver —What is not a waiaer of the cla/ase.

      a. Knowledge by the assurers that there were no fixtures in the premises "for the use of gas, and that the occupant immediately preceding the assured used spirit gas for lighting the premises, does not constitute a waiver of the clause, or permission to use spirit gas.
    Before Monell, Ch. J., Curtis and Speir, JJ.

      Decided May 2, 1874.

      An appeal from an order made by Monell, Ch. J., by which a verdict rendered in favor of the plaintiff, for nine hundred dollars, was set aside as being contrary to law and evidence. The motion was made pursuant to section 264 of the Code of Procedure.

      Mr. George W. Parsons, for appellant.

      Messrs. Kurzman & Teaman, for respondent.
   By the Court.—Speir, J.

The action was on a policy of insurance. The defense on the trial was that the plaintiff used spirit gas in his store, which was inhibited in the policy, and that its use, without the permission of the defendant, was a violation of the warranty in the policy. On the question as to the waiver of that condition of insurance by the defendant,. the jury found a verdict for the plaintiff. On this question of waiver alone the court granted the motion to set aside the verdict on its minutes. On a careful examination of the evidence, it merely showed that the defendants knew of the use of spirit gas by a former tenant; that did not justify a finding that the plaintiff had a permission for its continued or future use.

The order must be affirmed, with costs.

Monell, Ch. J., and Curtis, J., concurred.