132 N.Y.S. 309 | N.Y. App. Div. | 1911
Lead Opinion
This is a derivative action brought by minority stockholders of the Home Alliance Realty Company, a domestic corporation. The defendants Nekarda, Orbach, Zemelc and Slabey were ■ incorporators and trustees. Defendant Tenner was a real estate broker, defendant Pressberger was the owner of a contract for the purchase of certain real estate situated on Long Island, which he conveyed to the Home Alliance Realty Company for the sum of $90,500. The court has found that the defendants Orbach and Nekarda, promoters and incorporators, entered into a conspiracy to defraud the corporation by representing that the purchase, price of the property was $90,509, causing the company to pay said sum therefor to Pressberger, when, as matter of fact, the real price -\yas $76,000, and that they entered into an agreement by which Pressberger was to pay back to them $14,000 of -the purchase price received from the company, which was to be divided between Orbach, Nekardn and Tenner; that said agreement was partially carried out; .that Pressberger paid to Nekarda $7,385, of which sum Nekarda paid to Orbach $3,492.50, to Tenner $200 and retained $3,69.2.50 himself.
The action is to recover for the benefit of the company from its promoters and unfaithful trustees the $14,000 which it was fraudulently caused to pay for its property above the real price, and from the defendant Pressberger the $6,615, the portion of said $14,000 alleged to still remain in his hands.
We are satisfied that the judgment appeale'd from, so far as the defendants Orbach, Nekarda and Tenner are concerned, is right, and that the evidence fully sustains the finding of the learned court at Special Term of their fraudulent conspiracy to despoil their associates and the corporation, for their own benefit.
The defendant Pressberger was not a promoter, or incorpo
Pressherger claims, upon that finding, that the conclusion of law that he is liable to the said Home Alliance Realty Company in the sum of $6,615 with interest thereon from December 10, 1906, at the rate of two and one-half per cent per annum, is unwarranted. The respondents undertake to support it upon the theory that the $14,000 in excess of the real price of the property which went into his hands and which he agreed to pay to Nekarda was a trust fund which they were entitled to pursue. Pressherger claims that assuming that proposition to be correct, the burden was upon the plaintiffs' to allege and establish the fact that he had said sum in his possession.
In the 15th paragraph of the complaint it is alleged: “And said defendant Mendel Pressbei’ger still holds in his possession the sum of $6,615,” which allegation is denied in the 8th paragraph of Pressberger’s answer. The court has found that said Pressherger still has in his possession and under his control the sum of $6,615. He claims that said fin d ing is unsupported hy any evidence, and this the respondents admit, hut claim that having shown that $14,000 of the corporation’s money went into his possession, the burden was upon him and not upon plaintiffs to show that he no longer- had it. Incidentally it may be remarked that upon the trial Pressherger attempted to amend his answer by alleging payment of this amount, but that the court refused to allow such amendment, and he took his exception.
Of course, ordinarily, payment is an affirmative defense and must be alleged and proved, hut the complaint alleged affirmatively that Pressherger had in his possession this amount of money, which was met by a positive denial, and it seems to me
In attempting to laydown the rules governing the allegation of payment, Vann, J., said, in Conkling v. Weatherwax (181 N. Y. 258, 268): “ 3. When the action is not upon contract for the payment of money, but is upon an obligation created by operation of law, or is for the enforcement of a lien where non-payment of the amount secured is part of the cause of action,. it is necessary both to allege and prove the fact of non-payment.”
In the case at bar the cause of action is not upon contract, but if it exists is upon an obligation created by operation of law. It would, therefore, seem that the plaintiffs were right when they alleged in their complaint that the money was still in the possession of the defendant, and that the burden was upon them to sustain that' allegation by proof, upon the trial, and that not having done so the judgment is based upon a finding unsupported by the evidence, and, so far as the defendant Pressberger is concerned, must be reversed and a new trial ordered, with costs to him to abide the event.
The judgment is .erroneous in form in that it provides that the defendants pay to the plaintiffs for and on behalf of said Home Alliance Realty Company the sum prescribed. Being a derivative action the judgment should provide for direct payment to the principal, the corporation, and should be modified accordingly.
The judgment as modified is affirmed as to the defendants ISTekarda, Orbach and Tenner, with costs and disbursements to the respondents, and reversed as to the defendant Pressberger, and a new trial ordered, with costs to the appellant to abide the event.
Ingraham, P. J., McLaughlin and Miller, JJ., concurred.
Dissenting Opinion
(dissenting):
I vote for affirmance of the judgment.
