83 N.Y.S. 315 | N.Y. App. Div. | 1903
This action in various phases has been before this court many times. In 1894 the defendants McKinnon and Burrows suffered default, and a judgment was entered by the plaintiff against them.
The situation being- presented to the bankruptcy court on the 27th of April, 1901, that'court ordered that the plaintiff should be permitted and authorized to proceed in the courts of .the State .of Hew York to liquidate, his .claim against the bankrupts, and that he- make James H. Clark, the trustee in bankruptcy of the -defendants, a party defendant therein, and enjoined the prosecution of the action in the State court until the trustee should be made .a party. Thereupon the plamtiff applied to the State court, at Special Term,, for an order ■ making the trustee a party, and an order to that effect -was made at the Broome Special Tferm. on the 2d d'áy of July, 1901. The 'defendants appealed from that order to. this court, where the order was modified by inserting" therein a .direction that a supplemental summons and complaint issue and be served on the defendants,, and as so modified the order was affirmed.. Subsequently, on...motion of .the defendants, the order originally entered on ■ such affirmance and modification .was further modified by directing that the supplemental complaint contain.,an allegation setting forth the bankruptcy of .the said defendants McKinnon and Burrows, .and the appointment and qualification of said Clark, as trustee^ -and-other proper, and necessary allegations. ' .
A supplemental complaint was served, and the defendants, moved to be allowed to serve a supplemental answer alleging their discharge in bankruptcy obtained since-the action was commenced. That motion was denied by the Special Term by an order entered on the 30th.day of. Rovember, .1901, and.on appeal that,, order, was affirmed by "this" court... (Latimer v. McKinnon, 72 App. Div. 290.). This court there held that .the refusal to allow the service.-of. a supplemental answer setting up the discharge of C.the ¡defendants
The supplemental complaint served by the plaintiff alleged, in •substance, that the defendants McKinnon and Burrows filed on the 10th of January, 1901, a petition in bankruptcy, and were thereupon adjudged bankrupts, and that "thereafter the defendant Clark was appointed trustee in bankruptcy of such defendants, and qualified and entered upon the discharge ■ of his duty as such, and closed with a prayer for judgment for the amount claimed in the original complaint.
The demurrer served states that the defendant Clark, as trustee, “ demurs to the complaint and to the supplemental complaint herein upon the ground that neither they, nor either of them, contain facts sufficient to constitute a cause of action against him, the said Joseph H. Clark, as trustee.” It is from an order overruling this demurrer and interlocutory judgment entered thereon that the defendant Clark appeals.
If, under the peculiar circumstances under which Clark was brought into the action, the plaintiff is required to state in his supplemental complaint a cause of action against • Clark, as trustee, then the demurrer was well taken. If, however, the plaintiff is only required by his original and supplemental pleading to state a good cause of action against McKinnon and Burrows, with appropriate allegations as to why Clark, as trustee, is made a defendant, without stating a cause of action against him, then the demurrer was properly overruled and the judgment entered thereon should be affirmed.
The theory upon which the bankruptcy court directed that the trustee appointed by it should be made a party to the action in the State court was manifestly because it desired that'its officer should know of the various steps taken in the action sb that he might guard against an excessive or collusive judgment.
In Hayward v. Hood (44 Hun, 128) a demurrer was interposed to a supplemental complaint. The court had given leave to the plaintiff to file a supplemental complaint, and one was filed alleging certain facts additional to. those which were contained in the original complaint. In considering the demurrer, the court said: “ It is undoubtedly true that the supplemental complaint did not set up a cause of action.' as against the defendants. It was not intended so to do. It was the mere • allegation of additional facts to those which had been alleged in the original complaint for the purpose of supplementing that complaint. It is also true that the order gave the defendants the right to answer or demur to said supplemental complaint. But as the supplemental complaint did not pretend to. set ■ out an independent or different cause of action from that contained ■ in the original complaint, it was to be read as part and parcel of the complaint, and if the two contained a cause of action which was not demurrable an answer upon the part of the defendants was required.”
In Pierson v. Cronk (13 N. Y. St. Repr. 556) Van Brunt, P. J., says: “ The office of a supplemental complaint is to bi’ing before the court material facts which have occurred since the service of the original pleading, and only such should be contained therein.”
But it is said that the original complaint and the supplemental complaint do not state a cause of action as against the trustee. This was not necessary. The title to the defendants’ property, passed to him.' He stands in the same position as the defendants with respect to the litigation, and can raise no issue that they could not raise, and in addition is bound by the issues tendered by them in their original answer.
It is true that an action to foreclose a mortgage differs from an action on contract with respect to the rights of a trustee in bankruptcy. But the bankruptcy court ordered that the trustee be made a party and stayed the prosecution of the action in the State courts until he should be made a party. He was not made a party because there was any cause of action against him, but merely that he might see that the litigation against the parties whom he represented was properly conducted. He could not change the admissions of the original defendants in their answer, nor could he admit away by his own answer any defense which they might have.
In Forbes v. Waller (25 N. Y. 430) the action was in aid of an execution and a receiver of the defendants had been appointed who was made a party by order. The court says: “ He (the receiver) could not by his answer to the supplemental complaint change the issue already formed in the action or withdraw or nullify admissions already made upon the record. His allegation of ignorance of a fact already admitted by the record did not put thsjt fact in issue, as a like averment in the original answer would have done. The only thing that could properly be put in issue by the answer to the supplemental complaint was the matter showing the transmission of
Here,-again, the cause, of action was-not like one on contract. But it seems to us that, considering the relations of - the trustee- with the litigation,-and -the reasons for his:being brought.into,the-action,.and the position in winch he stands, it was not necessary-that a-good • cause of action be.alleged against him and that he could not demur hecause-none was alleged.
■The fact that-the prayer to the supplemental complaint .'demands the same-judgment as the original complaint does not. change the situation. The plaintiff,cannot take judgment on the supplemental complaint alone. There is an answer in the. case, and the provision of section 1207 of the Code of .Civil Procedure, .That ho - judgment shall be taken more favorable to the plaintiff than that -demanded •in the complaint, applies only when there is no-answer served. The same section provides that -where there is an ¡answer the ¡court may permit the plaintiff to take any judgment. consistent with .the case made by the complaint and embraced within ¡the issue. If there •shall ever come a time when judgment is obtainedln this case, ;the trial court will see that no improper judgment against ¡the trustee -is entered. The averments of the original , and supplemental -complaints clearly-show that he-is sued in his representative capacity, and not as an individual, which is. sufficient. (Scrantom v. Farmers & Mechanics' Bank of Rochester, 33 Barb. 527.)
'Our conclusion is that the.order and judgment .of the Special 'Term overruling the demurrer should be affirmed, with costs'.
All concurred.
Judgment and order affirmed,-with-costs.