author: By the Court.—Monell, Ch. J. Speir, J. (dissenting).

text:
    NATHANIEL WHITMAN, Plaintiff and Respondent, v. FRANCIS B. NICOL, and WILLIAM DAVIDSON, Defendants and Appellants.
    Before Monell, Ch. J., Sedgwick and Speir, JJ.

      Decided January 11, 1875.
    I. COVENANT BY LESSEE TO PAY TAXES AND CROTON RATES.
    1. Construction of.
    .1. A covenant by the lessee that he will “pay all taxes arid croton water rates that might be imposed or assessed, or become a. lien on the premises at any time during the term,, when due and payable,” does not require the lessee to pay the taxes and croton water rates before they became due and payable to the proper authorities.

      a. Imposition of tax does not raise a Ubüity on the part of the lessee.
    II. PRESUMPTION.
    1. As against the lessee no presumption arises from the mere imposition of a tax, that it is in fact due and payable.
    „ The action was to recover upon a covenant of the defendant, contained in a lease of certain premises in this city, that he would pay “all taxes and croton water rates that might be imposed or assessed, or become a lien on- the premises at any time during the term, when due and payable.”
    It is then alleged that the taxes for the year 1872 and 1873, and the croton water rate of. 1873 have been imposed, and that the defendants .have neglected and refused to pay the same, and in consequence of such refusal, the defendants have-become liable to pay twelve per cent, interest thereon, as imposed by law. ,
    The relief demanded is for a judgment against the defendants for said principal sums, with the interest thereon.
    The defendants demurred to the complaint, alleging that it did not contain facts sufficient to constitute a cause of action.
    The demurrer was adjudged frivolous, and judgment was entered, from which the defendants appealed.

      Palmer & De Camp, attorneys, and of counsel for appellants,
    urged;—I. The complaint is bad in its first count, in that it does not state in what manner, or by what authority the taxes were imposed on the premises, in question, nor does it even state that the taxes were “duly” imposed. The case of Rector, &c., of Trinity Church v. Higgins (48 N. Y., 532), while it holds that the lessor of property can maintain an action on a covenant in the lease that the lessee shall pay the taxes, without first paying the tax, yet it also holds that the taxes must be “duly imposed.” In order to entitle the plaintiff to enter judgment on his complaint, this fact could be clearly stated therein.
    II. The first count in the complaint is bad, in that, it does not state that the taxes had become due and payable before the commencement of this action, nor does it state at what time said taxes did or would become due and payable, nor at what time the twelve per cent, interest imposed by law would commence to run thereon. The covenant of the defendants to pay the taxes as set up in the complaint, was that the defendants would pay “all taxes and croton water rates that might be imposed or assessed, or become a lien on said premises at anytime during said term when due and payable.” It is, then, absolutely, necessary that the complaint should state that said taxes had become due and payable before a caiuse of action is made out. And it is further necessary that the .complaint should state the exact time when said taxes became due and

      payable in order to lay the foundation for computing the amount of the judgment.
    III. The second and third counts in the complaint are open to the same objections and criticisms as the first, with the exception that they aver the date when additional interest was imposed.
    IY. This demurrer was not so frivolous as to warrant the court before which the motion was made in determining its insufficiency upon bare inspection, without consideration or argument. The questions presented by the demurrer were important. Hence, the demurrer should not have been overruled as frivolous (Sherman v. N. Y. Central Mills, 1 Abb. Pr. 190 ; Sixpenny Savings Bank v. Sloan, 2 Id. 414; Smith v. Mead, 14 Id. 262).

      G. W. Cotterill, attorney and of counsel for respondent,
    urged ;—L The demurrer is clearly frivolous as to all the alleged causes of action. The complaint alleges that the plaintiff is the owner of the premises leased; that the defendants agreed to pay all taxes and croton water rates that might be imposed, or assessed, or become a lien. The covenants are in the alternative and for the benefit of the plaintiff. If either contingency happened, the defendants became liable. The complainant alleges that the taxes were imposed, and that they were assessed. The breach, therefore, occurred. When a tax becomes imposed, it is assessed, and has become a lien (Rundell v. Lakey, 40 N. Y. 513 ; Manice v. Millen, 26 Barb. 41).
    II. The plaintiff is not obliged to pay the taxes in order to recover against the defendants (Rector, &c., of Trinity Church v. Higgins, 48 N. Y. 532).

    ITT. “On appeal from an order, rendering judg-, ment on a demurrer as frivolous, the order will not be reversed, unless the court are of the opinion that the demurrer was good” (Wesley v. Bennett, 5 Abb. Pr. 498).
   By the Court.—Monell, Ch. J.

The defendant’s covenant was to pay such taxes as might be imposed upon the leasehold premises during the term, when the same became due and pay able.

The right to recover more than nominal damages upon such a covenant without actual payment by the lessor, was not definitely settled in this State, until the recent decision of the Commission of Appeals in Trinity Church v. Higgins (48 N. Y. R. 532), when the court construed the covenant into a promise, and the tax a debt due from the covenantor to the covenantee. Under that decision this action can be maintained, if the facts alleged in the complaint are sufficient.

The law has been stretched a little, I think, to make it cover a present liability for an unpaid tax; and I am unwilling to apply it to any case that does nob clearly fall within the principles decided ; and it must, therefore, appear that the tax has been imposed, and has become due and payable.

The covenant to pay taxes, like the covenant to pay rent, is broken only upon failure to perform according to the terms of the covenant. An action for rent can not be maintained without alleging and proving that the rent is due, and it must be alleged to be due according to the terms and conditions of the lease. And so with a covenant to pay taxes, even if the covenant is silent as to the time of payment, it is at least doubtful, if in an action by the lessor to enforce payment, it would not be necessary to aver that the tax had been, not only imposed, but was in fact due and payable.

But here the covenant is to pay taxes only when they are due and payable; and there can not be a breach until the tax becomes due and payable.

The mere imposition of the tax does not raise the liability to the landlord, so that he may maintain the action. The tenant has guarded against that, by expressly limiting his obligation to a default in payment after the imposed, tax becomes due, and therefore, in enforcing the covenant, a default of the lessee at the time the obligation matured, must be averred.

It is very clear, I think, that an action will not lie upon the covenant in this case until after the tax had become due, and if so, then, as a matter of pleading, it was necessary to aver such fact, and if necessary to prove it on the trial.

It may be claimed, however, that it will be presumed from the mere imposition of a tax, that it was immediately due upon the imposition being made.

That may be so in respect to its lien upon the premises, but no presumption can be raised in respect to a personal obligation to pay, which is limited to the time when the tax in fact becomes due.

Taxes in this city are not due and payable upon, or immediately upon, the tax being imposed. The imposition of the tax is by one set of officials, and the collection of it by another set; and there must be some interim between the final action of the former, and the time when the latter begins to act.

But the law has settled the time when a tax is due and payable, and it is after the tax has been imposed.

The act of 1850 (Davies’ Laws, 1282), provides, that upon the assessment roll being completed by the board of supervisors (now board of estimate, &c.), it shall be transmitted to the receiver of taxes, who immediately thereafter shall give public notice that the taxes are then ‘ due and payable.’

The complaint does not allege, according to the terms of the covenant, that before suit brought, the taxes, the amount of which the plaintiff claims to recover, had become and were due and payable; and without such averment, the complaint did not, as I think, state facts sufficient to constitute a cause of action upon the defendant’s covenant.

The judgment should be reversed, with costs, and the defendant should have judgment final, sustaining the demurrer with costs, but with leave to the plaintiff to amend on payment of the costs of a demurrer and .subsequent proceedings.

Sedgwick, J., concurred.

Speir, J. (dissenting).

This is an appeal from an order overruling the demurrer to the complaint as frivolous, and ordering judgment for the relief demanded in the complaint. The demurrer was interposed on the ground that the complaint did not state a cause of action.

The complaint states, among other matters, in a lease executed to the defendants, that the defendants in and by their instrument, agreed to pay to the plaintiff the yearly rent of eighty-three hundred dollars, and all taxes and croton-water rates that might be imposed or assessed, or become a lien on said premises at any time during said term, when due and payable ; and that the defendants entered into the possession of said premises and occupied the same.

That the taxes for the year 1872 have been imposed on said building and premises, and amount to the sum of one thousand four hundred and fifty dollars and eighty-two cents, and the defendants refuse and neglect to pay the same, and in consequence of such refusal the defendants have become liable to pay twelve per cent, interest thereon, per annum, imposed by law. A second count is alleged as a second cause of action, claiming, in substantially the same terms as the first, for the taxes of 1873, and a third count in similar terms claims for the water rates of 1873.

The precise question raised by the demurrer is, that the complaint does not state that the taxes and water rates had become due and, pay able before the commencement of the action; nor does it state at what time-said taxes would become due and payable, nor at what time the twelve per cent, interest imposed would commence to run.

It is necessary, on this appeal, to ascertain whether the demurrer can be sustained, on argument, in order to reverse the judgment below. For it is well settled that an order rendering judgment on a demurrer as frivolous will not be reversed, unless the court is of the opinion that the demurrer would be sustained on argument, and will not be reversed merely because the court may think it not frivolous (Wesley v. Bennett, 6 Duer. 688 Wetherhead v. Allen, 28 Barb. 661; East River Bank v. Rogers, 7 Bosw. 494). The rule in the case on appeal differs from the rule on the original application to strike out, when the court must determine the fact upon a mere inspection.

If the parties by their covenant agreed to pay the taxes when imposed, or assessed, then they are liable under their covenant with the plaintiff, when the taxes,, or water rates, as between the parties to the agreement becomes the debt of the defendants. The plain construction of the covenant is intended, I think, to be in the alternative. The defendants become liable to pay when the taxes and water rates were imposed, or assessed, and, also, become liable to pay, when they become a lien on the premises, at any time during the term, when due and payable. The allegation is, that they agreed to pay the yearly rent of eight thousand three hundred dollars, and all taxes and croton water rates that might be imposed, or assessed—that is, yearly, when the rent was paid—then the provision is-made that they are to pay whenever these taxes or water rates become a lien on the premises, at any time during said term, when due and payable. This provision may very well be deemed to have reference either to extraordinary taxes and rates, or any change in the time when they may be imposed or assessed.

In Rundell v. Lakey (40 N. Y. 513), the court held that in an agreement between vendors and vendee' of premises where the vendee paid the tax, but was to be repaid by the vendors, ‘in case they were legally liable to pay it,” that the vendors were bound to pay at the time of the completion and delivery of the rolls, although the amount of the tax was not ascertained and fixed for some two months afterwards. This is-put upon the ground, as I understand the decision, that the roll constitutes the basis upon which the tax is imposed by the board of supervisors. After its completion and delivery, there is no power to alter or change it, and it remains the same until after confirmation.

In the case at bar the obligation is simply one between the parties. They had a right to make the covenant in such terms as they chose, and have no-reference to the time when either the taxes or the water rates are confirmed, but the undertaking becomes complete whenever the sums in either case are determined in amount, without regard to the question when the law fixes a time when payment may be enforced. I think the judgment should be affirmed, with costs.


source: Caselaw Access Project

author: By the Court.—Monell, Ch. J.

license: Public Domain

text:
    WILLIAM H. BEARD, Plaintiff and Appellant, v. JAMES P. SINNOTT, Defendant and Respondent.
    Before Monell, Ch. J., Sedgwick and Speir, JJ.

      Decided January 11, 1875.
    I. EXECUTION ISSUED AFTER, UPON JUDGMENT RENDERED BEFORE, DEATH OF DEPENDANT.
    1. Void. It and all proceedings are void as respects beal estate.
    1. Pu/rchaser of real estate on sale under, takes no tifia

    2. Judgment, satisfaction of, how pbocubed in such case.
    1. The judgment must be revived by the proceeding substituted by the Code in the place of the writ of scire facias.

    2. Execution must be issued on the judgment in such proceeding.

    3. Leave to issue execution must be obtained from the proper Surrogate, under chapter 295 of the laws of 1850.
    H. STATUTORY LAW. CUMULATIVE REMEDIES OR RESTRAINT.
    1. Act of 1850, ckapteb 295, effect of.
    1. It does not repeal, or in any manner affect, the provisions of the Code as to the necessity for, and mode of, reviving the judgment, except so far as it reduces the period during which no proceedings can he had to one year after the death.
    2. It is cumulative, and adds another restraint to those already existing, upon the collection of a judgment out of the property of a deceased judgment debtor.
    IH. CONSTITUTIONAL LAW.
    1. Depbiving one of his pbopebty without due pbocess of daw.

      a. Chapter 295 of the act of 1850 is void, as contravening this constitutional provision.
    It authorizes an ex parte proceeding to deprive a person of his property.
    Appeal from a judgment in favor- of defendant.
    The action was to recover the possession of a lot of land in the city of New York. It was tried by a referee, whose findings of fact comprise all the statement, of facts necessary.
    He found that on October 3, 1851, one Oliver Johnston was the owner in fee of the premises. That on "the same day a judgment was recovered against Johnston, upon which an execution was issued and returned wholly unsatisfied.
    That Johnston, who was an inhabitant of the city of Hew York, died intestate, in October, 1852, and letters of administration were issued upon his estate by the surrogate of said city.
    That, in September, 1861, the assignee of the judgment petitioned the surrogate for leave to issue execution upon the judgment ; and that such surrogate, upon sufficient, cause shown, granted the permission.
    That in pursuance of such permission, and of the statute in such case made and provided, an execution was issued upon the judgment, under which the sheriff sold all the right, title, and interest which Johnston had in the lot, on October 3, 1851, or at any time thereafter.
    That the sheriff executed a deed to one Harkins, who afterwards mortgaged the lot to one Johnston, which mortgage was foreclosed, and the lot sold and conveyed to said Johnston, who subsequently conveyed it to the defendant in this action.
    The referee further found that the plaintiff is heir-at-law to the extent of one-fourth of the estate of Johnston, the deceased judgment debtor.
    That there was no proof before him, the referee, that notice of the presentment of the petition to the surrogate, nor of the proceedings thereupon, was given either to the plaintiff or to any other person.
    Upon these facts, the referee decided that the sale by the sheriff was valid, and operated to convey a good title to the purchaser, and that the defendant, by the conveyance to him, became the owner of the* premises in fee simple. •
    Judgment was entered for the defendant, and the plaintiff appealed.

      John Townshend, attorney, and of counsel for appellant,
    urged, among other things ;—I. By the common law goods were bound from the teste of the execution (Allen on Sheriffs, p. 140); and, therefore, an-execution tested of a day prior to the death of a judgment debtor may be enforced as to personalty, after the* death of the debtor. But “ lands can not be sold bn an execution issued after the death of a defendant, although the execution bears teste as of a day previous-to the death of the debtor “ all the cases to be found in the books in which the exception is stated, relate to>* the common law writ of ft,, fa., which goes only against the goods ” (Stymets v. Brooks, 10 Wend. 207; Crocker on Sheriffs, § 404, 1st ed. ; Allen on Sheriffs, 190, ed. 1845; 1 Paine & Duer’s Pr. 66).
    II. “At common law no execution could legally issue on a judgment after the death of either of the parties . . . until the judgment was revived. . . . As to the effect of execution and sale, where the execution has issued without revival after the death of a party, there is a difference of opinion. In some of the-States they are holden to be absolutely void ; in others-only voidable. The weight of authority is that they are void ” (Rorer on Judicial Sales, p. 237, § 667). (a) In New York such sales are held void (Campbell v. Rawden, 19 Barb. 498, 18 N. Y. 421 ; Stymets v. Brooks, 10 Wend. 207, 212). (b) There is nothing in either Jackson v. Delancy, 13 Johns. 537, or Jackson v. Robins, 16 Id. 537, in conflict wflth Woodcock v. Bennett. In 13 Johns, the regularity of the scirefacias was not a point in issue. In 16 Johns, the -chancellor makes an adverse dictum on the authority of-Heistner v. Fortner, (2 Binncy, 40); but foEows it with the remark, “I need not pursue this point (i. e., the necessity ot' a sci.fa.) for a sci.fa. did actually issue in this case.” (c) The case of Heistner v. Fortner, cited by the chancellor, only decided that a judgment after one nihil upon a scire facias post annum etdiem, although irregular, can not be questioned in a collateral proceeding. (d) The United States supreme court held such a sale void (Erwins v. Dundas, 4 How. U. S. 58). (e) In Illinois such sales are held void (Brown v. Parker, 15 Ill. 307). (f) Such sales are also held void in Alabama, North Carolina, Tennessee, Indiana (Lucas v. Doe, 4 Ala. N. S. 679 ; Abercrombie v. Hall, 6 Id. 657 ; State v. Pool, 6 Ire. 288 ; State v. Michael, 8 Blackf. 436; Gwynn v. Latimer, 4 Yerg. 22). (g) In New Jersey -and Pennsylvania, such a sale is held not to be void (Den v. Hilman, 2 Halst. 180; Speer v. Sample, 4 Watts. 374). As to those cases it must be observed: in Den y. Hilman, the execution was tested before the -death of the debtor ; and Speer v. Sample is based on the peculiar practice of the Pennsylvania courts, and on the leaning in those courts to uphold judicial sales. Of both cases, it must be observed, that the reasoning -is not so reconcilable with received legal principles as •is the reasoning in the cases reaching the opposite conclusión. (7¿) In New Hampshire, there is but a dictum that an execution issued after the death of a judgment debtor is an irregularity only and not a nullity (Butler v. Haynes, 3 N. H. 21).
    III. The Code (§ 376) prescribes a substitute for a scire facias. Wherever it had theretofore been necessary to issue a scire f ocias, it is now necessary either to resort to that proceeding, or to a proceeding under .section 376 of the Code. The law of 1850, eh. 225, provides an additional preliminary to the issuance of an execution against the estate of a deceased judgment debtor, •but has riot dispensed with the proceedings provided by section 376 of the Code (Marine Bank of Chicago v. Van Brunt, 49 N. Y. 160; Wood v. Morehouse, 45 Id. 368).
    IY. Under the revised statutes where judgment is. obtained, and the defendant died before execution issued, a scire facias will not lie against the heirs and terre tenants until after a scire facias has been issued against the personal representatives of the deceased, and returned nihil (1 Paine <& Duer Pr. 69). This practice is retained by the Code, which provides (§ 376) that the personal representatives may be summoned to. show causé why the judgment should not be enforced within one year, and the heirs and tenants may be summoned after three years from grant of letters testamentary or of administration.
    Y. The question is not altogether whether or not execution was void or voidable, but whether the rights-of one not a party to the judgment can be bound by an execution issued after the death of the judgment debtor,, without notice to the party sought to be affected. Hakd, J......It is said that an execution without a scire facias is not void, but voidablé only by-writ of error, and can not be questioned in a collateral suit, and till reversed is a good justification. But there is another rule, that where a person not a party to-the record derives a benefit by, or becomes chargeable to the execution of it, there must be a scire facias to. make him a party to the judgment (Penoyer v. Bruce, 1 Salk. 319 ; 2 Saund. R. 6, n. 1; Id. 72, n. 4 ; Woodcock v. Bennett, 1 Cow. 611). And where judgment is. revived against real estate by writ of scire facias by our statute, the right of any person therein not made a. party to the writ, shall not be impaired or affected by such revival (Campbell v. Rawdon, 19 Barb. 498).
    Yl. The Revised Statutes provide, that “ where-any judgment or recovery shall be revived against any real estate by writ of scire facias, the right of any person therein, not made a party to such suit, shall not be-impaired or affected by such revival, unless he claim title from the tenant of such real estate, who was duly made a party thereto” (2 Rev. Stat. 577, § 5). This provision is new. Reviser’s Reports and ¡Notes (3 Rev. Stat. 2nd edit. 786). Opinion of Allbx J., in Campbell v. Rawdon, printed in the points, volume V., of' the Court of Appeals Cases, (a) The legislature passing this statute intended that execution should not be had upon the lands of a deceased judgment debtor without a scire facias, to which all persons having an interest and intended to be affected thereby must be made parties by a service of the writ upon them. Com-stock, J. (Campbell v. Rawdon, 18 N. Y. 421).
    VII. The case of The Bank of Genesee v. Spencer (18 N. Y. 150) is not in point. There one of several defendants died after judgment, and the execution was against the survivors. In such a case no scire faciaswas necessary. For “where there are two or more plaintiffs or defendants in a personal action, and one or more of them die after judgment, execution may be had within the two years for or against the survivors, without a scire facias, but the execution in such a ease should be taken out in the joint names of all the plaintiffs or defendants, otherwise it will not be warranted by the judgment” (1 Paine & Duer Pr. 66; citing numerous authorities), (a) Bank of Genesee v. Spencer only decides that an execution issued after the time limited for issuing without leave, the parties being alive, is an irregularity merely. This is conceded by the appellant.

      James P. Sinnott, in person, and Wm. W. Niles, of counsel for respondent,
    submitted an elaborate .brief, from which the following points are selected ;—I. Section 295 of act of 1850, authorizes a sale of the real estate of a .deceased judgment debtor on which the judgment was a lien at his death, upon an.. •execution issued on said judgment, without any further proceedings, provided permission to issue the execution is first obtained from the surrogate. In this case such permission was obtained. The surrogate acquired jurisdiction to grant the leave upon the presentation of the petition. He is presumed to know the status of the estate, and to be able to judge of the sufficiency of the cause to be shown, in any particular case. “ The jurisdiction of the surrogate,” says the learned judge, in the Marine Bank of Chicago v. Van Brunt, “was improperly exercised ;” an expression which admits its existence; for no one can improperly or otherwise exercise a power which he has not already acquired. The petition presented to the surrogate showed, prima facie, sufficient cause for the issue of the execution. It showed the judgment, the previous execution returned unsatisfied, the lien—for it must be borne in mind that the existence of the lien, at the time of the application to the. surrogate is unquestionable, that application having been made within the ten years,— the inhabitancy of the judgment debtor at the time of his decease, and the fact that the judgment remained unpaid. “ When the proof has a legal tendency to make out a proper case, in all its parts, for issuing the process,” says Jewitt, C. J., “then, although the proof may be slight and inconclusive, the process will be valid until it is set aside by a direct proceeding for that purpose” (Staples v. Fairchild, 3 N. Y. 46 ; Skinnion v. Kelley, 18 N. Y. 356 ; Van Alstyne v. Erwine, 11 N. Y. 340; Rusher v. Sherman, 28 Barb. 417; Miller v. Brinkerhoff, 4 Den. 119; Den v. Turner, 5 Wheat. 541; Buf. and St. Line R. R. Co. v. Supervisors of Erie, 48 N. Y. 100). Ho order which a court is empowered, under any circumstances, to make, can be treated as a nullity, merely becanse it was made improvidently, or in a manner not warranted by law •or the previous state of the case. The only question in such case is,—had the court or tribunal the power, under any circumstances, to make the order or perform the act? (Talmane v. McCarthy, 11 Wis. 406 ; Grignon’s Lessee v. Astor, 2 How. (U. S.) 340; Harvey v. Tyler, 2 Wall. 343; Voorhies v. Bank of the United States, 10 Pet. 449 ; Cooper v. Reynolds, 10 Wall. 309). In considering this question, we must bear in mind that the proceedings before the surrogate were not intended to obtain personal judgments against any person. The judgment had been pronounced, and had become a lien on the land. The proceedings were merely to enforce the lien against that land. It was a quasi proceeding in rein. It is true that the legal title to these lands had devolved upon the heirs ; but heirs are not bona fide purchasers. They take lands cum onere—charged with the payment of judgments, and subject to be sold to satisfy the same. How, the method of satisfying a judgment is by execution, and that execution directs the sheriff to satisfy the judgment out of the property, in whose hands soever the same may be. If the judgment debtor had, in his lifetime, given a deed of this property, the legal title to it would have rested completely in the grantee, justas completely as it devolved upon his heirs by his death. Yet the creditor would not be bound to notify or summon that grantee, before subjecting the property by execution to pay a judgment which remained a lien upon it.
    II. Counsel for appellant insists that the heirs must be summoned under section 376 of the Code. To sustain this he cites Wood v. Morehouse (45 N. Y. 368), and Marine Bank of Chicago v. Van Brunt (49 N. Y. 160). In the case of the Marine Bank of Chicago v. Van Brunt, the order to show cause upon which the execution was set aside was made in the original suit; and it required the plaintiff, and also the assignee of the judgment sought to be enforced, to show cause why the execution therein, and all proceedings subsequent to
      the judgment “ should not be set aside on the ground of irregularity,” because the execution was issued without any proper order of the surrogate, and without any notice to the representatives of the defendant, &c. The motion was granted, and an order made, that' the execution issued, as stated, to the Sheriff, “ be and the same is hereby set aside as irregular.” The assignee of the judgment appealed to the general term, and to the Court of Appeals, in succession, but the order was affirmed by each tribunal.
    The learned .judge who delivered the opinion concludes with these words: “Wood v. Morehouse (45 N. Y. 368), Alden v. Clark (11 How. Pr. 209), and Frink v. Morrison (13 Abb. Pr. 80), presented the same question as that before us, and were decided in accordance with the views already expressed.’ ’ So that the Court off Appeals intended, by this decision, to go no further than the Supreme Court had already done, and it commends, to us the cases of Frink v. Morrison and Alden v. Clark.
    The cases so commended and followed are, in our judgment, and, as we submit, irreconcilable with the view contended for by the appellant here. Although the learned Judge also mentions the case of Woody. Morehouse, the reference to the latter is not strictly accurate, because that case arose upon an execution issued in 1848, and before the passage of the act off 1850. Besides, the point decided in that case was, that an execution issued in the life-time of the judgment, debtor might be executed after his death, and a sale under such an execution was upheld. The defendant here has no cause to quarrel with that view of the law.
    Judge Allen, in the Van Brunt case, says : “ The act of 1850 is not in conflict with the provisions (using: the plural) of the Code, or inconsistent with the remedy given by it. It is cumulative, and adds another restraint to those already existing” (40 N. Y. 163).
    That the learned Judge did not, by this language, mean that heirs, &c., must in all cases of the death of their ancestor with judgments standing against him, be summoned, is quite obvious on a comparison of section 376, with the act of 1850. Section 376 allows the summons to be issued only after the expiration of three years from the time of granting letters testamentary or of administration.
    The act of 1850 allows an execution to issue at any time after the expiration of one year from the death, and notwithstanding that no letters testamentary or of administration have been issued.
    The act of 1850 is only “cumulative” (which in. this connection is a very infelicitous expression), in the sense that it provides for the permission of'the surrogate being given before execution issued, whereas, previously the whole matter rested with the court of law alone. It is in that sense that it is “an additional restraint to those already existing,” and in no other sense.
    This will be made clearly apparent by referring to-the case of Alden «. Clark, cited by the Judge with approval, and decided by a court of which he was a. member.
    The two provisions of law are not “in conflict,” for the very simple reason that each has its own sphere of operation.
    III. Even under the old system, when the formal proceedings by scire facias were especially required by law, the better opinion is, that an execution issued without it, after the death of the judgment debtor, would not be void, but only voidable. For this we have the great authority of Chancellor Kest, and his views upon that point have never been overruled in this State, although in one case (1 Cow. 711) a contrary opinion has been expressed (Jackson v. Delancy, 13 John. 537; Jackson v. Robins 16 Id. 537; 3 Caines, 270; 8 John. 365 ; Heister v. Fortner, 2 Binney, 40; Bennett v. Hamill, 2 Scole & Lefroy, 566). Again it is said that the word voidable implies that there is somebody who can avoid the process. But if real estate descends to an heir, charged by matter of public record with the lien of a judgment, and it is proposed to sell it under a voidable process, is not the heir capable, and is not his plain duty to prevent the execution of that process, or to set aside and avoid it afterwards? “Every person,” says Mullir, J., “whose rights are injuriously affected by a judgment, or proceedings under it, has the right to move the court to set aside or amend them, although he is not a party to the action ” (Glould v. Mortimer, 16 Abb. Pr. N. S. 448).
    IY. But whatever may be the rule under the former-practice, I insist that, under the act of 1850, it is impossible to maintain the invalidity of this process on the technical and artificial grounds .urged against executions issued without a scire facias. Some effect must be given to the act above mentioned. The learned judge, in Alden v. Clark, says “it was intended to provide a more simple and expeditious mode than previously existed for the enforcement of judgment liens against the property of deceased judgment debtor. ' The act itself says that, notwithstanding the death, the execution may be issued in the same manner and with the ■same effect as if the judgment debtor were still living,” provided only that the permission of the surrogate be •obtained. The learned judge, above referred to, refused costs because the practice was entirely unsettled. How much so this is, is well illustrated by the fact that twelve years after this opinion was rendered, the Broome county general term, consisting of three very eminent judges, held that an application to the court was not necessary at all, and that the order of the surrogate was sufficient to authorize the execution. And still another year later, Mr. Justice Mullir held the same thing, and dissented from the case of Alden y, Clark. Logical-minded men found it hard to nullify the plain language of the act of 150 (Vide:—Wilgus v. Bloodgood, 33 How. Pr., 289 ; Flanagan v. Tinin, 37 How. Pr., 130). It certainly will be a great hardship if, for an alleged mistake in a matter of practice so unsettled, that the costs of a motion were refused, and which accorded with the views of some of the most eminent jurists of this state—and it will be seen by the case that the proceedings here were conducted by the present Mr. Justice Gilbert—a man’s estate should be confiscated. The courts take judicial notice of an unsettled condition of the law, and resolve all possible doubts in favor of parties acquiring property in reliance upon their decisions for the time being (Robb v. Irwin, 15 Ohio, 689; Snevely v. Lowe, 18 Id. 368).
    V. But this case is distinguishable from Marine Bank of Chicago v. Van Brunt for another and very important reason, the force of which was recognized by Mr. Justice In graham in the latter case. It is this— In the Van Brunt case no execution had been issued during the lifetime of the deceased judgment debtor. In this case such execution was issued and returned wholly unsatisfied. In delivering the opinion upon the motion from which the appeal in the Van Brunt case arose, Mr. Justice Ihg-raham expressly states that where an execution has been o,nce issued, within five years after judgment, in the lifetime of the judgment debtor, no application to the court is necessary to sustain the second execution, issued after his death, but in such case the permission of the surrogate is alone sufficient. Although the court of appeals do not make their, decision turn on that point, neither do they expressly repudiate it; and we are desirous to be heard before them on that point without being considered foreclosed by their mere silence. Under the old system there was no doubt of this principle, so far as goods and chattels were concerned. An alias and pluries might be issued. The record was considered continued down. There is nothing, founded in sound sense or good reason, which makes real estate, under the Code, any less subject to be sold on execution than personal property.
   By the Court.—Monell, Ch. J.

Oliver Johnston is the common source of title of each of the parties to this action. The plaintiff claims as his heir-at-law, and the defendant under a judgment recovered against Johnston in his life-time.

The judgment absolutely abated by the death of Johnston, and could not be enforced against his property without the institution of certain proceedings provided by law.

Until the adoption of the code of procedure, a resort was had to the writ of scire facias, to summon the representatives or heirs of the deceased debtor, to show cause why the judgment should not be executed. The same proceeding, and for the same purpose, is now in the form of a summons prescribed by the Code.

The proceeding is substantially the same under either form. The representatives or heirs are to be summoned, and the party summoned may answer, denying the judgment, or setting up any defense which may have arisen subsequent to the judgment (Code, § 379 ; 2 BurrilV s Pr. 167). Upon default of the persons summoned to appear and answer, or upon the determination of the issue made by their answer, a formal judgment that the plaintiff have execution, is entered ; and the execution is issued upon that judgment (2 Burrill's Pr. 171; 3 Id. 114), commanding the amount to be made of the real estate of the deceased debtor (2 R. 8. 367, § 25).

No proceeding of this nature was instituted to revive the judgment against the heirs of Johnston, and, it is now claimed, none was necessary, inasmuch as the act of 1850 (Sess. Laws, 1850, Oh. 295, § 1), which provides a different and more summary mode, must be regarded as in effect repealing the proceeding required by the •Code.

The act referred to is as follows: Section 1. Notwithstanding the death of a party after judgment, execution thereon against any property, lands, tenements, real estate, or chattels real, upon which such judgment shall be a lien, either at law or in equity, maybe issued and executed in the same manner, and with the same effect, as if he were still living, except that such execution cannot be issued within a year after the death of the defendant, nor in any case, unless upon permission ■granted by the surrogate of the county who has jurisdiction to grant administration, or letters testamentary, on the estate of the deceased judgment debtor, which surrogate may, on sufficient cause shown, make an ■order granting permission to issue such execution as •afoiesaid.”

It is enough to say of this statute, that the decisions are uniform, that it does not repeal, nor in any manner affect, the provision of the Code, except that it reduces the period after the death of the debtor to one year (Alden v. Clark, 11 How. Pr. 209 ; Frink v. Morrison 13 Abb. 80; Wood v. Morehouse, 45 N. Y. 368; Marine Bank v. Van Brunt, 49 Id. 160). In the last cited •case, the court say the act is merely cumulative, and adds another restraint to those already existing, but that an execution can not issue without the order and permission of both tribunals. Under these decisions, the issuance of the execution upon the abated judgment was irregular and voidable. And this brings us to the question of real difficulty in the case.

It is claimed that the omission to summon the heirs and the issuing of the execution without a revival of the judgment, was a mere irregularity, and does not affect the title of the purchaser under the sheriff s sale.

In none of the cases cited, except one, did the question arise otherwise than upon a motion for leave to-issue, or to set aside the execution already issued. And in deciding those cases it was not necessary to go farther than to hold that an execution could not be issued in such cases without a resort to the substituted proceeding for scire facias.

But in Wood v. Morehouse (supra) the action was by the heirs-at-law to redeem the property from a mortgage which had been a lien upon it before it descended to them, and which had been foreclosed without giving them notice. The defendants claimed in opposition to the heirs, under a judgment against their ancestor. Before his death an execution had been issued upon-, the judgment, under which the sheriff had advertised the saie ; but before the time required had expired, the-judgment debtor died. Nevertheless, the sheriff proceeded with the sale, and gave a deed to the purchaser,, under whom the defendants held. The court say: “ Process having been issued for the collection of the judgment by the sale of the real property of the judgment debtor, and its execution commenced, by an advertisement of the mortgaged premises for sale, in pursuance of the statute, the execution of the process-was not arrested by the death of the judgment debtor. But an execution cannot be issued after his death which, will authorize the sale of the real estate which may be-bound by the judgment. An execution cannot be sued out against heirs or terre tenants, without giving them an opportunity to be heard. The judgment must be-revived against them. The rule is, that when a, new person, who was not a party to a judgment, desires a benefit by, or becomes chargeable to, the execution, there must be a scire facias to make him a party to the judgment, before execution can issue.”

In that case the purchasers at the sale had purchased for a valuable consideration, in good faith, and without-notice, or knowledge that the notice of sale had not been posted the time required by law. But the decision is not put upon the ground that the character of the purchase afforded a protection, except perhaps so far as he might claim protection under the presumption that an officer required to do an act had done it; but upon the ground that the execution of the process had already commenced before the judgment debtor’s death,, and, therefore, no revival of the judgment was necessary. But the language of the learned court is clear, that to authorize a sale the judgment must be revived, if the death occurs before execution issued.

The validity of a title derived under a sheriff’s sale depends upon the validity of the judgment, and of the execution upon it, and one claiming title under such a sale must show the judgment, and that it is regular (Townshend v. Wesson, 4 Duer, 342). Without a valid judgment an execution would not authorize a sale, and. the proceeding would be void (Ibid).

We have seen that a proceeding to revive a judgment against the heirs of a deceased debtor, requires a new judgment to be entered, upon which, and as it seems upon which alone, an execution can issue.

If, therefore, a party defending his title under a purchase at a sheriff’s sale must show a valid judgment (Townshend v. Wesson, supra) to sustain the execution in an ordinary case, must he not also show, when he claims under a judgment which has abated by the death of the debtor, that the new judgment required by law has been obtained ?

To sustain the sale in this case would open it to the constitutional objection, that no person shall be-deprived of property without due process of law. The heirs of Johnston inherited his property. They took an absolute title in fee simple, cum onere of course, and of such title they could not be divested, except through the forms and by the proceedings prescribed by law-In those proceedings they had the right to be heard. They conld make a variety of defenses. They could show the judgment had been paid ; that it should be satisfied out of the personalty, if there was sufficient (2 R. S. 87, § 27); or that other real property upon which the judgment was a lien should contribute or be subjected to it. And it was in view of these various defenses that, as is said in Marine Bank v. Van Brunt (ubi supra), the act of 1850 was passed so that th'e surrogate could properly adjust the equities, which a court of law is unable to do.

Even, therefore, if it could be held that the act of 1850 provided the only proceeding required to revive a judgment, the constitutional objection I have stated, would, in my judgment, render the act void. It authorizes an ex parte proceeding to deprive a person of his property. It requires no notice to be given, nor affords any opportunity to the person, who is to be despoiled of his property, to be heard.

The inevitable deduction from all this is, that the omission to revive the judgment in the manner provided by law, rendered the execution and the sale under it, not irregular and voidable merely, but absolutely void.

And there is authority for the deduction.

In Woodcock v. Bennett (1 Cow. 711), the validity -of such a sale was directly involved, and the court held, that without a scire facias to revive the judgment against the heirs, the execution was void. Justice Woodworth says (p. 740): “To sanction such a proceeding, would be an invasion of one of the great principles upon which our security depends under a government of laws ; that no person shall be put out of his freehold, or lose his goods or chattels, unless he be -duly brought to answer, or be forejudged of the same by due course of law.”

In Stymets v. Brooks (10 Wend. 207) Nelson, J., says (p. 214): “On the death of the defendant, the real estate descends to Ms heirs, and to allow execution to be afterwards issued and the lands sold, would he affecting the rights of new parties, without an opportunity to be heard.”

And in Campbell v. Rawdon (19 Barb. 494), approved by the Court of Appeals (18 N. Y. R,. 421), one of the heirs had not been served with the scire facias, and the court held, that under the statute (2 Rev. Stat. 577, § 5) as well as by the authority of decisions, his title and interest was not affected or divested. The Court of Appeals sáy: “We think the legislature, in passing this statute, intended that execution should not be had upon the lands of a deceased judgment debtor, without a scire facias, to which all persons having an interest and intended to be affected thereby, must be made parties by service of the writ upon them.”

The distinction which the respondent’s counsel claim was legitimate, from the fact that an execution had been issued upon the judgment before the death of the •debtor, and returned unsatisfied, is not allowed by any of the cases I have referred to. The right to issue a second execution without leave of the court applies only to cases where no revival of the judgment is necessary.

Section 284 of the code does not supersede or defeat section 376.

The view we have taken of the act of 1850, and of the insufficiency of the surrogate’s order under it, to validate the sale, and as a consequence invalidate the -plaintiff’s title, renders the question whether the plaintiff had notice of the proceeding before the surrogate immaterial. If, however, there was notice, it was with the defendant to show it, and the referee has found that there was no proof of any such notice.

The remaining objection that the suit is not brought in the name of the proper plaintiff, requires no examination, as the referee has decided otherwise and the-defendant has not excepted.

Upon the whole case we are brought to the conclusion that the decision of the referee was erroneous.

We are aware that the defendant has acted in good • faith, and has paid a valuable consideration for the land, in the belief that the title was good. To Mm it is a great hardship and loss, but that can not be measured against the vindication of the law and the rights of other parties, who stand equally innocent.

The judgment must be reversed, and a new trial had, with costs to the appellant to abide the event». Order of reference also vacated.

Sedgwick and Speie, JJ., concurred.


author: By the Court.—Speir, J.

text:
    THE WHITNEY ARMS COMPANY, Plaintiff and Respondent, v. SAMUEL L. M. BARLOW, FRANKLIN W. BROOKS, and EDWARD PARKMAN, Defendants and Appellants.
    I. REPORTS UNDER SECTION 13 OF THE MANUFACTURING-ACT. LAW OF 1848, CHAP. 40, P. 54.
    1. What ihshpeioibht.
    1. A report stating “the amount of the capital stoalc of this company, and which has been issued .for the purchase of patent rights, and which has been paid in cash, is three hundred thousand dollars; amount of existing debts, forty-five thousand three hundred and seventy-three dollars and eighty-eight cents, ” is insufficient.

      Before Mokell, Oh. J., Sedgwick and Speir, JJ.

      Decided January 11, 1875.
    It does not state the amount of the deposit, nor the proportion thereof actually paid in.

      a. Trustees liable under section 12, notwithstanding the filing of such report.
    2. Pleading. Averment of default in filing report.
    Under an averment that the corporation did not within twenty days from January 1, 1871, nor at anytime during that year, make and publish, nor have they at any time whatever made and published a report, as required by law, &c., and filed the same, an action commenced after January 20, 1873, may be sustained upon a default in filing the report which should have been filed within twenty days after Janua/ry 1, 1873, no report having previously been filed in compliance with the statute.
    JI. ULTRA VIRES.
    1. When no defense.
    1. One who has received benefits from, or fruits of, a contract with a corporation, can not set up the defense of ultra vires until he restores such benefits, or fruits, or their equivalent.
    2. Who can not insist on the defense.
    1. Trustees.—When the corporation can not insist on the defense, its trustees when proceeded against, under section 12, chapter 40, of Law of 1848,' can not.

    3. What does not fall within specified corporate powers.
    1. Where the corporate powers are the manufacturing every variety offtre-a/rms and other implements of war applicable to the use of fire-arms and all kinds of machinery adapted to the construction thereof, they do not include a power to manufacture and deliver circular railroad lochs.

    The action is brought by a foreign corporation ■created by a private aht of incorporation of the legislature of the State of Connecticut against the defendants as trustees of the American Seal Lock Company, a corporation created under the laws of this State upon the ground of their failure as such trustees to cause to •be filed the' reports required by law under the act for the formation of corporations for manufacturing, &c., passed February 17, 1848. The averment of failure, as contained in the complaint, was as follows :
    “The plaintiff further avers, upon information and. belief, that said last named company, The American Seal Lock Company, did not, within twenty days from January 1, 1871, nor at any time during that year, make and publish, nor have they at any time-whatever since their organization, made and published a report as required by law in such case made and provided, verified by the oath of the president and secretary thereof, and filed the same in the office of the clerk of the county where the business of the company was-carried on, or in the office of the clerk of any county of this State ; nor did said last named corporation make, publish, sign, cause to be verified, and file any such report whatever, until the plaintiff’s cause of action had. arisen, and until after said contract had been made and delivered as aforesaid ; nor has said last named company either made, published, signed, verified, or caused to be verified or filed, any such report as by law required, but wholly failed to do so.”
    The contract upon which the action is brought is-dated October 6, 1871. The plaintiff agrees to manufacture for and deliver to The American Seal Lock Company twenty thousand circular railroad locks of the best quality, upon certain conditions specified as to quantity, when and where to be delivered, and finished in a thorough and workmanlike manner, subject to the decision of the United States inspector, and any locks not accepted by him, shall be returned to the Whitney Arms Company, at Whitneyville, Connecticut, they paying the freight and charges both ways.” Some modifications of the contract were mutually made by the parties. It appeared on the trial that no-report whatever was filed until January 19,1872. That on January 19, 1872, a report in the following form was filed:

      “Annual Report oe the American “Company. Seal Look
    (Stamp 5c. ) \ Canceled, f.
    “ The amount of the capital stock of this company and which has been issued for the purchase of patent rights, and which has been paid in cash, is $300,000-Amount of existing debts, $45,393 88.
    “E. Parkman, “ F. W. Brooks, Trustees.

    “ Samuel L. M. Barlow,
    “ Presidents

    And on January 18, 1873, there was filed a report in the same fofm.
    The action was commenced on or subsequent to January 31, 1873. Other facts also appeared which are-noticed in the opinion.
    The court directed a verdict for the plaintiff. Judgment having been entered on the verdict, the defendants appealed therefrom.

      Barlow, Laroque & Macfarland, attorneys for appellant Barlow, Sol. Hanford, attorney for appellant. Brooks & Parkman, and W. W. Macfarland, of counsel among other things,
    urged ;—I. The contract between the plaintiff and the American Seal Lock Company, which is the foundation of this action,, was manifestly ultra vires as to the former company. It is therefore void, and no cause of action can arise out of it (Chitty on Cont., 11 Am. Ed., p. 385, and note ; Brady v. Mayor, 2 Bosw. 173; Life and Fire Ins. Co. v. Mechanics’ Fire Ins. Co., 7 Wend. 31; People v. Utica Fire Ins. Co., 15 Johns. 358;, Sewall v. Allen, 6 Wend. 335; DeGroff v. American Linen Thread Co., 21 N. Y. 124; McMasters v. Reed, 1 Grant (Pa.) 36; N. Y. Firemen Ins. Co. v. Sturges, 2 Cow. 664; Same v. Ely, Id. 678; Catlin v. Eagle Bank 6 Conn. 233 ; Ocum Co. v. Sprague Manuf. Co., 34 Conn. 552; City of New London v. Brainard, 22 Conn. 552 ; Gray v. Hook, 4 Comst. 449 ; Chitty on Cont. 11 Am. Ed., 972). There is a class of 'Cases called sometimes exceptions to the rule now under discussion,—cases where the defendant is held to be estopped from raising the question of authority. It is, however, apparent, upon a little reflection, that they are not exceptions to the rule, and have nothing to do with it. They are all cases where the defendant has, by contracting with the corporation, obtained money, goods, or services, and seeks to avoid payment, on the ground that the transaction was on the part of the corporation ultra vires. Or they are cases where the defendant being a corporation seeks to defraud in like cases, on the ground of its own want of authority in the premises. In these cases, courts do not always -consider the question of authority and the doctrine of ultra vires. The transaction may be ultra vires the corporation, but the law considers it to be a fraud to allege it to be so. The law will not permit that to be alleged which, if true, is against honesty and good faith, and puts its seal on the lips of the defendant, condemning him to silence in respect to the question. He is concluded by an estoppel (Moss v. Rossie Lead Manuf. Co., 5 Hill, 137; DeGroff v. Am. Linen Co., 21 N. Y. 126; Steam Nav. Co. v. Weed, 17 Barb. 378 ; Sackett’s Harbor Bank v. Lewis Co. Bank, 11 Barb. 213). But to bring this rule into operation, there must be privity of contract or estate. Here there is neither. The defendants sustain no relation to the plaintiff. Their liability rests upon the terms of a highly penal statute (Garrison v. Howe, 17 N. Y. 458). They are not estopped, therefore, from setting up this defense.
    II. Assuming this contract to have been in all respects .a valid contract, still the defendants are not liable because there was no existing debt before or in Jan-nary, 1871, and the. action is predicated solely on the default in filing the report for the year 1871. (1). The plaintiff must have been a creditor of the company at the time of the alleged default—not a creditor in posse, but a creditor in esse. There must have been a “ debt ’ ’ —subsisting—in esse, not in posse, either at the time of the default, or some time during its continuance. In the case at bar, therefore, there must have been a debt subsisting against this company, and in favor of this plaintiff, prior to January 1, 1873. (3). A subsisting debt, according to any, even the largest interpretation, can not mean a subsisting liability, such as an execu tory agreement for the manufacture of commodities. It may mean, in its broadest acceptation, a sum certain, owing presently, but payable in the future. While it is manifest that under any possible construction of the words, “ debts then existing,” the defendant can not be liable, the true construction, it is submitted, is, that at the time of the default there must be a subsisting debt, for the recovery of which an action would lie. This is the natural and ordinary meaning. The statute is a penal statute. The plaintiff takes his remedy strietissimi juris (Merchants’ Bank v. Bliss, 1 Robt. 391). The point made in this second branch of the defense is sustained by Garrison v. Howe (17 N. Y. 458). In this case there was a contract for the delivery of lumber at a future day. It was held that no debt arose within the meaning of the statute till the delivery of the property.

      D. M. Porter, attorney and of counsel for respondent,
    urged;—I. The liability of the defendant in this case is in the nature of tort and not of contract (Strong v. Sproul, 4 Daly, 326 ; Andrews v. Murray, 33 Barb. 354 ; Miller v. White, 50 N. Y. 137). “It is clear that the liability of the defendant is not imposed as an indemnity, because it has no relation to the actual loss or injury sustained by the party in whose favor the action was-given. It is sufficient that the party prosecuting the actio,n, should be a creditor when the violation of the law takes place” (Merchants’ Bank v. Bliss, 35 N. Y. 412).
    II. “The trustees of a manufacturing corporation are neither parties nor privies to the original contract, nor to any note or judgment’’"(Miller v. White, supra). “ The defendants are neither principal debtors nor sureties, but are liable for the penalties- prescribed by the statute” (Miller v. White, supra).

    III. The defendants are so far disconnected with the state of the original indebtedness that ‘a judgment recovered.in the original cause of action, as against the corporation, is no evidence against the trustees.” The liability of the trustees can only be established upon and by proving the original demand (Miller v. White, supra). And the defendants are liable for the indebtedness existing at the time of the default,' any changes in the state of the original indebtedness to the contrary notwithstanding (Vincent v. Sands, 33 N. Y. Sup’r Ct. R. 511; Deming v. Puleston, Id. 231; Miller v. White, supra). In each of these cases notes have been taken, and subsequently passed into judgment. And even .if the trustees had been sureties, as they claim, the renewals having been made at their request, they would still remain liable, notwithstanding the extension (Wright v. Storrs, 6 Bosw. 600 ; Affirmed, 32 N. Y. 691).
    IV. It is submitted that the papers intended for reports do not meet the requirements of the statute. They do not state the amount of capital, nor the proportion actually paid in, but simply state the amount which had not been paid in, in cash, and the amount issued for patent rights, as required by section 6 of the act, add the report required by section 12 has never bepn made, and consequently leaving the items required by section 12 wholly nnmentioned. There is a distinction between the amount of capital and the amount paid for patent rights, section 6, and the amount of capital, and the proportion actually paid in, section 12 of the laws of 1848. Again the verification to it is imperfect, being upon knowledge and belief only.
    XT". It is admitted in the answer that no report was filed until January 19, 1872, and that the contract was made when there was a positive default; but it is submitted that there were, in fact, no reports under section 12, the alleged reports being insufficient and of no ■effect, for the reasons above stated. The defendant’s motion to dismiss the complaint was properly overruled, because, to have decided as requested would have been error. .
    VI. It is submitted that the charter of the plaintiff authorizes making these locks, which were intended! for the government to protect supplies during war ; but , even if it did not, the Seal Lock Company having dealt, with the company and received the benefit of the contract, and given notes for the balance due, it and the-trustees are estopped from disputing the right to con-, tract (Steam Navigation Co. v. Weed, 17 Barb. 878; Mott v. U. S. Trust Co., 19 Id. 568 ; Palmer v. Lawrence, 3 Band. 170).
   By the Court.—Speir, J.

The American Seal Lock Company was organized in May, 1870, and during that year very little business was transacted. The contract on which the action is based is dated October, 1871, and it is conceded that up to January 19, 1872, no report was made or filed. From the organization of the company, until the action was brought in February, 1873, the defendants were the sole trustees of the corporation.

It appears from the evidence that the locks were not delivered at the several times specified in the contract, but a few were delivered in December, 1871; how many does not appear. The most definite testimony produced ón the subject of deliveries was by Mr. Whitney, the president of the plaintiff’s company, who says: “They were delivered in January, 1872; the majority of the ten thousand was delivered in the month of January, 1872 - pretty much all during the month of January. 1872.”

The plaintiff proved as evidence of indebtedness of the American Seal Lock Company, two promissory notes, one for three thousand four hundred and forty-three dollars and nineteen cents, dated June (I, 1872, three months after date; the other for two thousand four hundred and seventy-nine dollars and thirteen cents, dated May 30, 1872, two months after date.

These were renewals of previous notes dated respectively, January 24, and January 31,1872, given by the Américan Seal Lock Company, in the year 1872, in payment for locks that had been delivered at their respective dates. On the trial the plaintiff offered to return the renewed notes.

It is comparatively of little importance, in the view Í take of the case, to ascertain whether any portion of the locks were delivered in December, 1871, or indeed, whether any of the certificates were verified and filed within the time required by the twelfth section of the statute. It is very plain that the certificates which were filed, do not comply with the requirements of the section.' They do not state the amount of capital, nor the proportion actually paid in. They do state the amount of the existing debts, and that is all.

It has been repeatedly held that the general object of the law was, besides enforcing the duty of making reports for the benefit of all concerned, to enable persons proposing to deal with the corporation to see whether they could safely do so. These certificates would afford no useful information to anybody inquiring as to amount of capital, or thq proportion' actually paid in.

The learned counsel for the appellant, I think, must have taken this view of the case, as he has placed his objections substantially on other grounds. First, that the contract between the two companies, which is the foundation of the action, was ultra vires as to the plaintiff; and second, that at the time of the alleged default, the plaintiff must have been a creditor of the company in esse, and not in posse. In other words, there must have been a debt subsisting, and in favor of this plaintiff prior to January, 1872.

The first objection fairly stated is that the plaintiff agrees to “ manufacture and deliver to the American Seal Lock Company twenty thousand circular railroad locks,”—that the subject-matter under the contract bears no relation whatever to any of the articles which the company is authorized under its charter to make and sell. It is quite apparent, I think, that a body politic and corporate created and organized for the purpose of manufacturing every variety of fire arms and other implements of war applicable to the use of fire-arms, and all kinds of machinery adapted to the construction thereof, and otherwise, can not be construed into a corporate authority to manufacture and deliver circular railroad locks, any more than they could to make and deliver railroads, or railroad cars.

But are the defendants at liberty to discuss with the sovereign power of the State of Connecticut the extent of the plaintiff’s chartered privileges, until they have restored the property, or its value, which they unjustly hold without proper compensation. I)uer, J., says: “A defendant who has contracted with a corporation defacto is never permitted to allege any defect in its organization as affecting its capacity to contract or sue, but all such objections, if valid, are only available on behalf of the sovereign power of the State” (Palmer v. Lawrence, 3 Sand. S. C. R. 170; The Chester Glass Co. v. Dewey, 16 Mass. 102). The defendants should not be permitted in law or equity to rescind a contract the fruits of which they retain, and can never be compelled to restore if this doctrine is carried out. It was decided in Moss v. The Rossie Lead Mining Co. (5 Hill 137) that a corporation can never' avoid its obligation on the ground that it was given for property which the corporation was not authorized to purchase. If the company was bound, I see no reason why the trustees should not also be bound by the contract. But defendant’s counsel say there must be privity of contract or estate to apply the rule of estoppel from setting up this defense,—and the argument is, that the liability resting upon the terms of a penal statute, an estoppel can not arise against the defendants. A little consideration only, is required to see that this penal statute, for such it doubtless is, can have no operation whatever, except as applied to a contract express or implied between parties to it, which is the first condition of privity of contract.. It is, I think, this feature in the transaction which gives to the statute its chief value.

Tne second objection is that the trustees are only liable for debts of the company then, existing. It is claimed that inasmuch as the plaintiff took the notes of the company which did not mature until after the reports were filed, the debt was not subsisting against the defendant’s company in favor of the plaintiff prior to the time of tiling the report; that it was not a sain certain owing presenting but payable in the future. In the case at bar we have already seen that the reports do not meet the requirements of the statute. Even if the proposition of the counsel be sound, it cannot avail, for the notes fell due on or prior to September 10, 1872, and remained unpaid at the time'of the trial when they were tendered to defendants, so that there was on September 10, 1872, a subsisting debt then due, and which continued to be due at the time of the commencement of this action, which was on or after January 31, 1873, and still continues to be due.

Therefore there was a subsisting debt due at the time of the default in filing the report, which should have been filed within twenty days after January 1, 3873.

The case must be disposed of as though there had never been any reports filed. I fully agree that the statute is penal, and is to be strictly construed, and that the rules of law do not permit us to extend it by construction to cases not fairly within the language. As, however, the debt was actually due when the notes were tendered to the plaintiff when the defendant’s liability attached under the statute, it is not necessary to extend the discussion of the question raised.

The judgment is affirmed, with costs

Monell, Ch. J. and Sedgwick, J. concurred.


author: By the Court.—Freedman, J.

text:
    JEREMIAH E. CARY, Plaintiff, v. WILLIAM G. GREGORY, as Executor, &c., Defendant. MORRIS S. BLOODGOOD, Plaintiff, v. WILLIAM G. GREGORY, as Executor, &c., Defendant.
    Before Freedman and Speir, JJ.

      Decided February 1, 1875.
    APPEAL TO COURT OP APPEALS.
    1. Motion for leave to, denied.

    Application of principles of Butterfield ». Radde (ante, p. 44).
    For the decision from which it was sought to appeal, see anteT pp. 137 and 133.
    Motions by'plaintiffs for leave to appeal to the court of appeals.
   By the Court.—Freedman, J.

The motion-papers fail to show that these cases involve some question of law, which according to the true intent and meaning of chapter 322, of the Laws of 1874, and within the rules laid down by this court, in Butterfield v. Radde (ante, p. 44), ought to be reviewed by the court of appeals. Hor did the examination which I have given to these cases have the effect of raising a doubt in my mind as to the correctness of the decisions made by the general term of this court.

The motions for certificates to authorize appeals to the court of appeals, should be denied with ten dollars costs.

Speir, J., concurred.


text:
    HERMAN STURM v. THE ATLANTIC MUTUAL INSURANCE COMPANY. SAME v. JOHN S. WILLIAMS. HERMAN FUNKE et al. v. THE ORIENT MUTUAL INSURANCE COMPANY. THE SAME v. THE NEW YORK MUTUAL INSURANCE COMPANY.
    Before Sedgwick, Van Vorst and Speir, JJ.

      Decided December 9, 1874.
   In each of these four cases the defendant moved for a new trial upon voluminous affidavits on the ground of newly discovered evidence. The motions were heard and denied at Special Term, and on appeal to the General Term, the decision below was affirmed. There is a brief statement of the reasons for affirmation made by the court, all the judges concurring.


text:
    HERMAN FUNKE and others, Plaintiffs and Respondents, v. THE NEW YORK MUTUAL INSURANCE COMPANY, Defendant and Appellant.
    Before Sedgwick, Van Yorst and Speir, JJ.

      Decided December 9, 1874.
    Appeal from a judgment.

      Samuel E. Lyon and Richard S. Emmett, for appellants.

      Charles M. DaCosta, for respondents.
   Judgment reversed and new trial granted for the same reasons stated in the case of Funke et al. v. The Orient Mutual Ins. Co. (ante, page 319).

Opinion by Speir, J., Sedgwick and Yan Yorst, JJ., concurring.


text:
    HENRY WHEELER, Receiver, &c., Plaintiff and Appellant, v. JEROME E. BATES et al., Defendants and Respondents.
    Before Freedman, Van Vorst and Speir, JJ.

      Decided December 9, 1874.

      Titus B. Eldridge, for appellant.

      P. & D. Mitchell, for respondents.
   Appeal from an order denying motion for judgment for want of an answer, and from order opening default and permitting defendant to answer. Orders affirmed.

No opinion.


text:
    HIRAM BENNER et al., Plaintiffs, v. DAVID H. BALDWIN, Defendant.
    Before Freedman, Van Vorst and Speir, JJ.

      Decided December 9, 1874.
    Appeal from a judgment in favor of the plaintiff for the balance of a bill of cotton sold to the defendant. Both parties appealed from the same.

      Nelson, Cook & Thorn, for plaintiffs.

      Evarts, Southmayd & Choate, for defendants.
   Judgment affirmed.

Opinion by Speir, J., Freedman and Van Vorst, JJ., concurring.


text:
    JOHN SCHREYER, Plaintiff and Appellant, v. THE MAYOR, ALDERMEN and COMMONALTY OF THE CITY OF NEW YORK, Defendants and Respondents.
    I. Pleading,—Admission by,—Effect of.
    1. When the defendant’s pleading/orraa% and, explicitly admits that which establishes the plaintiff’s right, be will not be suffered to dewy its existence or to prove any state of facts inconsistent with that admission.

      a. Thus, when the complaint avers that the contract sued on was made by the defendant, and the answer expressly admits such averment, the defendant can not be permitted to prove,—
    1. Either that the contract was not his, and that consequently he was not liable thereon.
    2. Or (there being no affirmative defense to that effect) that the contract, being fair on its face, was illegal.

    3. Illegality of contbact,—Defense of must be pleaded, WHEN.
    1. When the complaint avers the making of a contract fair on its face, and the answer admits such merment, the illegality of the contract can not be insisted on to defeat a recovery, unless such illegality is set up in the answer as an affirmative defense.

    Before Freedman, Curtis and Speir, JJ.

      Decided February 1, 1875.

      This action is brought to recover the eighth and last instalment upon a contract entered into by the defendants through the school trustees of the Tenth-ward of the city of New York, with the consent of the Board of Public Instruction of said city, with Alonzo Dutch, for the erection of a school-house. By the terms of the contract, it was to inure to the benefit of the Mayor,. Aldermen and Commonalty of the city of New York. The contractor Dutch having failed, and having received the seventh instalment, leaving the eighth only unearned and unpaid, the plaintiff, with the consent of all parties, took an assignment of the contract from Dutch. This was recognized and assented to, and the-plaintiff went on, furnished the materials and did the work necessary to earn the eighth and last payment. Thereupon the trustees and the Board of Public Instruction made the necessary certificates and requisitions upon the comptroller of the city of New York to require the payment of said three thousand dollars to the plaintiff, and so as to vest the money in the plaintiff ;—in other words, the Board of Public Instruction and the school trustees of the Tenth-ward and the plaintiff had performed all the conditions precedent to entitle the plaintiff to receive his money and to require the defendant to pay the same ; and the comptroller had and has the money in hand to the credit of the Board of Public Instruction and the school trustees of the Tenth-ward.
    Upon the trial plaintiff’s complaint was dismissed,, and defendants entered judgment.
    The plaintiff appealed from the judgment.

      D. M. Porter, counsel for appellant.

      E. Delafield Smith and D. J. Dean, counsel for respondents.
   By the Court.—Freedman, J.

The motion for a nonsuit was granted on the ground that the contract sued upon was not the contract of the defendants, and that they were not liable on it, and if the defendants were in a position to raise the objection, the complaint was properly dismissed. In Ham v. The Mayor, &c (37 Superior Ct. R. 458), this court distinctly held that the defendants are not liable for the acts or contracts of the Board of Education or the Department of Public Instruction, and this decision, if applicable to the case at. bar, would be conclusive upon that point. But under the pleadings in this case the defendants could not raise the objection. The complaint charged the defendants with having made the contract for the work, and with having agreed to pay the contract price. The answer expressly admits these allegations, and refers to the school trustees of the Tenth-ward, as defendants’ agents. The defendants have therefore concluded themselves by such admission. A party, who formally and explicitly admits, by his pleading, that which establishes the plaintiff’s right, will not be suffered to deny its existence, or to prove any state of facts inconsistent with that admission (Paige v. Willet, 38 N. Y. 28).

The admission referred to also precludes the defendants from insisting in the absence of a formal plea to that effect, that the contract as made is an illegal one. Since the Code, any new matter constituting a defense or partial defense must be pleaded (McKyring v. Bull, 16 N. Y. 297), and hence the objection that a contract which is fair upon its face, is illegal or contrary to public policy, must be taken by answer (Cummings v. Barkalow, 4 Keyes, 514).

The judgment should be reversed, and a new trial ordered, with costs to appellant to abide the event.

Curtis and Speir, JJ., concurred.


text:
    MORGAN L. WEBB, Plaintiff and Appellant, v. CORNELIUS VANDERBILT, et al., Directors of the Lake Shore and Michigan Southern Railway Company, impleaded with the Lake Shore and Michigan Southern Railway Company, and others, Dependants and Respondents. FRANCIS H. STODDARD, Plaintiff and Appellant, v. SAME. EVERETT B. SANDERS, Plaintiff and Appellant, v. SAME. JAMES LAURIE, Plaintiff, and Appellant, v. SAME. THE TRUSTEES OF SMITH COLLEGE, Plaintiff and Appellant, v. SAME.
    I. DEMURRER.—ONE DEPENDANT ANSWERING WHILE OTHERS DEMUR.
    1. Effect of on demurrants.
    1. The fact that one of the defendants has answered, has no effect upon the determination of the question as to whether the demurrer is well taken or not.
    H. STOCKHOLDERS HOLDING COMMON STOCK,—WHEN ACTION WILL NOT LIE AGAINST.
    1. An action at law to recover an ascertained debt due by the corporation, will not.

      2. An action in eguii/y to compel them as stockholders of common stock of a consolidated corporation to make, or to do any act towards causing to be made dividends on the stock of one of the consolidating companies, of earnings made by such consolidating company prior to the consolidation, the payment of which dividends is claimed to have been assumed by the consolidated company, or to compel them to declare or do any act towards causing to be declared, dividend on the stock of such consolidating company of the earnings of the consolidated one will not.

      a. Compare the opinion in this case with the one in Chase v. Vanderbilt (37 N. Y. Superior Ct. R. 334).
    Before Freedman, Curtis and Speir, JJ.

      Decided February 1, 1875.
    These are appeals from orders sustaining demurrers to the complaints, with leave to the plaintiff to amend. The substance of the complaints and demurrers is the same as that of the complaint and demurrers in Chase v. Vanderbilt (33 N. Y. Sup'r Ct. R. 334).
    Birdseye, Cloyd, & Baylis, attorneys, and Lucien Birdseye, of counsel for appellant, urged; - I. It is not proposed to re-argue here any of the questions passed upon by the general term of this court in Chase v. Vanderbilt (37 N. Y. Sup'r Ct. R. 334); but, assuming all that was held by the court in that opinion, and adding other material facts (which although before the court in that case, were not referred to or considered by it), to ask for the judgment of the court upon the points raised by such additional and material facts. Those additional facts are that, while Vanderbilt and other individual defendants demurred to the complaint, the corporation—the Lake Shore & Michigan Southern Railway Company—had appeared and answered in the action, taking issue upon the allegations of the complaint, and that the demurrants are holders of the common stock of Ihe Lake Shore & Michigan Southern Railway Company.
    II. After an answer has been interposed to the complaint, the demand for relief becomes immaterial (Code § 275; Marquat v. Marquat, 12 N. Y. 336; Emery v. Pease, 20 N. Y. 62). The only limitations put upon the rule that, after answer, the demand of relief in the complaint is immaterial, are : (1) That the relief must be limited to such as is proper in reference to the parties before the court. (2) It must be consistent with the case made by the complaint and embraced within the issue. (3) An action must be the proper remedy (Smith v. Howard, 20 How. Pr. R. 151; Cowenhoven v. City of Brooklyn, 38 Barb. 9; Bradley v. Aldrich, 40 N. Y. 510; Hart v. Harvey, 21 How. Pr. R 382; Barlow v. Scott, 24 N. Y. 40; Armitage v. Pulver, 37 N. Y. 494; Greason v. Keteltas, 17 N. Y. 491; N. Y. Ice Co. v. North Western Ins. Co. of Oswego, 23 N. Y. 357; Bidwell v. Astor Mutual Ins. Co., 16 N. Y. 263; Heywood v. City of Buffalo, 14 N. Y. 534; Rome Exchange Bank v. Eames, 1 Keyes, 588; Mann v. Fairchild, 2 Keyes, 106; Beach v. Cook, 28 N. Y. 508; Wright v. Hooker, 10 N. Y. 51; Scott v. Pilkington, 15 Abb. 280; Gordon v. Hostetter, 4 Abb. N. S. 263; Colten v. Jones, 7 Rob. 164; Byxbie v. Wood, 24 N. Y. 607).
    III. It appearing that a good cause of action, of a legal character, is stated in the complaint against the Lake Shore & Michigan Southern Railway Company, as a corporation, upon its assumption of a guarantee of the preferred dividends, and that that corporation interposed an answer to that complaint; so that, under section 275 of the Code, and the cases decided under it, the demand for equitable relief has, as to that corporation, become immaterial, the action may proceed to trial upon the legal cause of action, and before a jury, if the corporation shall so insist; and the question now remains whether, to such an action against a corporation by a preferred stockholder, it is wholly incompetent and inadmissible to bring in holders of the common or unpreferred stock as defendants, to determine whether or not the holders of preferred stock are entitled to priority in payment of dividends over the 'common or unpreferred stock. It is submitted that, to such action, the common stockholders, or some of them, are proper parties (Code, §§ 118, 119). (4) Section 118 of the Code merely re-enacts the former practice. It divides parties into two classes: {a) Those who are proper parlies, whom, therefore, the plaintiff may sometimes join, or omit to join, as parties, in his discretion. (5) Those who are necessary parties, without whom the suit is absolutely defective. (5) The former rule on this point was to the same effect (Bailey v. Inglee, 2 Paige, 278; Butts v. Genung, 5 Paige, 254, 256; Wendell v. Van Rensselaer, 1 Johns. Ch. 344, 349; Wiser v. Blatchley, 1 Id. 437; Murray v. Hay, 1 Barb. Ch. 59; Weale v. West Middlesex Water Works Co., 1 Jac. & Walk, 369; The Attorney-General v. Jackson, 11 Vesey (Sumner), 365 and notes. Adair v. The New River Co.; 11 Id. (Sumner), 429, 443; Cockburn v. Thompson, 16 Id. (Sumner), 321, 325-8, and notes page 350). See 1 Moak's Van Santvoord’s Pleadings, 105, where he speaks of “necessary, as well as proper parties defendant” (Id. 107), &c., as to cases “where persons who are not absolutely necessary parties may be made defendants, at the election of the complainants ” (Id. 746, 859). (6) The facts stated as to the number, absence, &c., of the common stockholders, sufficiently excuse the joining of any other holders of common stock than those named in the complaint (Code, § 119. 1 Moak's Van Santvoord’s Pleadings, 77, 79, 116-17, &c.). (7) In Thompson v. The Erie Railway Co. (45 N. Y. 468, 478), the court of appeals very, recently overruled the position that in a suit (precisely like the present) by a stockholder to recover preferred or guaranteed dividends, the common stockholders were absolutely essential parties. But the ruling of the court treats them as proper parties, so that their joinder would not be ground for a demurrer. (8) In numerous actions in England and Ireland, brought to enforce the rights of preferred stockholders to their dividends, it has never been held that holders of common stock were improper parties, but almost uniformly the reverse. In most of these cases the directors, as such, have been made defendants. The cases may be classified as follows: (a) Cases in which holders of common stock, other than directors, were made parties; Crawford v. North Eastern Railway Co., 3 Kay & J. 723; Corry v. Londonderry & Enniskillen RailwayCo., 29 Beav. 263; Coates v. Nottingham Water Works, 30 Id. 86; Smith v. Cork & Bandon, Railway Co., Irish Rep., 3 Eq. 356; Maugham v. Leamington Gas Co., 15 Weekly Rep. 333, (ib) Cases in which directors were joined with averment (like that in the present complaint) that they held common stock; Matthews v. Great Northern R. R. Co., 5 Jurist, N. S. 284. (c) Two cases in which it does not appear from the reports, whether or not common stockholders were joined; Sturge v. Eastern Union R. Co., 7 De G. M. & G. 858; Henry v. Great Northern R. Co., 1 Id. 606. (9) In Cramer v. Bird (L. Rep. 6 Eq. 143), common stockholders were held, for the purposes of that action, to be sufficiently represented by the directors; but the fund involved, was small, and it was obvious that the whole of it would be absorbed between two classes of preferred stockholders; but the court held expressly that the inferior class of preferred stockholders were not sufficiently represented by the directors, and refused to allow the action to proceed till some of that class had been made parties. (10) In several English cases, it has been decided that holders of common stock were not sufficiently represented by the directors; and that all stockholders, whose interests might be affected ' the decision, must be represented before the coir ->r-wise than through the medium of the corpor . itself or of directors whose interests did not upper Richardson v. Larpent, 2 Younge & Coll. 507; Lovell v. Andrew, 15 Simons. 581: Bailey v. Birkinhead R. Co., 12 Beav. 433; Carlisle v. S. E. R. Co. 1 McN. & G. 689; Fawcet v. Laurie, 1 Drewry & Emale, 192). (11) Both Sedgwick, J., and Speir, J., in their opinions, have entirely overlooked the portions of the complaint here referred to, and these grounds for the joinder of the defendants demurring as holders of the common stock. The learned judge disposed of the case upon the authority of Haywood v. The City of Buffalo (14 N. Y. 537), above mentioned. And no reference was made by him to the distinction existing between that case and the present one, above adverted to. Here the corporation sued is liable for the debt, has interposed its answer, and the prayer for judgment has become immaterial under the cases above cited. In the case of Heywood, both defendants demurred to the complaint, which was one asking for equitable relief, in a case where no relief, either in law or in equity, could be granted, because the case was an attempt to enjoin perpetually the collection, by a municipal corporation, of an assessment due to it for the improvement of streets, the plaintiff not showing any ground whatever either for legal or equitable relief, and not averring but that the alleged invalidity of the assessment appeared on the face of the record.

      Matthews & Foley, attorneys, and James Matthews, of counsel for respondents, in addition to the authorities cited in Chase v. Vanderbilt, cited Stevenson v. Buxton, 15 Abb. Pr. 352; Kilbourn v. Allyn, 7 Lansing, 352; Brahe v. Pythagoras Association, &c., 11 How. Pr. 45; Brewster v. Michigan Central E. E. 5 How. Pr. 183; Prouty v. Lake Shore & M. S. E. Do. 52 N. Y. 363 ; Story Eq. § 1520.
   By the Court.—Freedman, J.

The appeals before us present precisely the same questions that were determined by this court in Chase v. Vanderbilt (37 N. Y. Superior Ct. R. 334). It was held in that case that the complaint stated no cause of action whatever against the defendants, the parties demurring ; and the ground of that decision was, not that the court did not possess jurisdiction of the subject-matter, or of the questions involved, but that the defendants could do nothing, nor could they be compelled by judicial sentence to do anything, which would give to the plaintiff the dividends he claimed, and that, therefore, the defendants were neither necessary nor proper parties to the suit. Until that decision is reversed by some higher court, it is conclusive upon us upon the questions covered by it.

The appellants insist, however, that the attention of the court was not called to, and the court on that occasion did not consider the fact, that while Vanderbilt and the other directors demurred to the complaint, the corporation, the Lake Shore & Michigan Southern Railway Company, had appeared and answered, and had taken issue upon - the allegations of the complaint. There is nothing in the suggestion. Where there are several defendants, some may answer, while others demur. A demurrer is, in effect, a declaration that the. party demurring will go no further, because the other has shown nothing against him. And a demurrer will be sustained where the cause of action set forth in the complaint fails to show any connection between the facts therein alleged, and the party defendant by whom the demurrer is interposed. But even those who answer, do not thereby waive the objection that the complaint does not state facts sufficient to constitute a cause of action (Code § 148).

It is also insisted that the court overlooked the fact that the defendants demurring were not only directors, but also holders of common stock. This suggestion is equally unavailable. If as directors they could neither do anything, nor be compelled to do anything, which would give to the plaintiffs the dividends, the payment of which they claim was assumed by the Lake Shore & Michigan Southern Railway Company, it is difficult to perceive what they can do, or be compelled to do, in their capacity of holders of part of the stock. If the company is liable upon the obligation assumed or incurred by it, as alleged, it must respond in its corporate capacity, and if the defendants, as directors, are neither necessary nor proper parties to the action set out against the corporation, they are still less so as holders of part of the stock.

The order sustaining the demurrer in each of the five above entitled actions should be affirmed, with costs.

Curtis and Speir, JJ., concurred.