39 N.Y.S. 153 | N.Y. App. Div. | 1896
These four actions being brought by different plaintiffs, although they are against the same defendants, section 817 of the Code of Civil Procedure, giving authority to consolidate actions, does not apply. Actions can only be consolidated under this section when
But, nevertheless, the four actions ought not to be permitted to proceed. They are brought by different plaintiffs against the same persons, who are, as it appears, directors of the United States and Brazil Mail Steamship Company, and the executors of a deceased director of that company. The object of each action is to establish against these defendants the liability created by section 24 of the Stock Corporation Law, which provides that “ no stock corporation, except a monied corporation, shall create any debt if thereby its total indebtedness not secured by mortgage shall exceed the amount of its paid-up capital stock, and the directors creating or consenting to the creation of any such debt, shall be personally liable therefor to the creditors of the corporation.” (Stock Corp. Law, § 24, Laws of 1892, chap. 688.) It is alleged in the complaint that the defendants and one Edward B. Bartlett were during the year 1892 and down to and including the month of March, 1893, directors of the United States and Brazil Steamship Company ; that Bartlett is dead and the defendant Maria H. N. .Bartlett is the executor of his last will and testament. It is further stated that the capital stock of the company is $1,000,000, but that there had been created an indebtedness of over $3,500,000 against said corporation, not secured by mortgage, and that this large indebtedness had been created or consented to by the directors. The plaintiffs in each case allege that they are creditors of the company, and in each action a judgment is asked against the defendants for the amount of the debt which the company owes to the plaintiffs in that action respectively, and for an accounting and other relief. The nature of the liability which is sought to he asserted in this action has been quite recently examined and settled by the Court of Appeals. It is said that the liability imposed upon the trustees who create or consent to the creation of a debt in excess of that permitted by law is not for the benefit of any particular creditor, but for the benefit of all, and that that liability is in equity a fund to which all the creditors may resort for the satisfaction of such debts as the corporation itself
The order appealed from consolidating the actions must be reversed, and an order made requiring the plaintiffs to elect in which of the actions they will proceed, and staying proceedings in the other-actions as herein provided, neither party to have costs of this, appeal.
Barrett, Williams, Patterson and Ingraham, JJ., concurred.
Order reversed, and order entered requiring the plaintiffs to elect, and staying proceedings in the other actions as provided in opinion, neither party to have costs of appeal.