Lovelace v. Doran & Wright Co., 15 N.Y.S. 279

Lovelace v. Doran & Wright Co.

15 N.Y.S. 279 | N.Y. Sup. Ct. | 1891

Lead Opinion

Hardin, P. J.

We think the facts set out in the complaint are sufficient to constitute a cause of action against Doran & Wright Company, Limited, as a corporation.

2. By the opinion delivered at this term in Lovelace v. Doran, 15 N. Y. Supp. 278, we have held that the complaint contains a cause of action against the individual defendants, however, that is not based upon the same contract made by the corporation. The contract made by the corporation is binding by its note. The liability of the individual defendants arises out of facts and circumstances aliunde the note, to-wit, that the individual defendants are directors of the corporation, and as such consented that the indebtedness of the corporation should be in excess of its capital stock, and, by reason of such consent, the statute of 1875, § 22, imposes a liability for such excessive indebtedness; and the plaintiff, being a holder of a portion of the excessive indebtedness created, is entitled to recover thereon. In the course of the opinion delivered by Landon, J., in Patterson v. Robinson, 37 Hun, 344, he states that “the liability of the assenting trustee is a contract,” and he adds: “The assenting trustee, knowing that the indebtedness of the company has reached at least an amount equal to the capital stock, concurs with the company in contracting further indebtedness. He knows that the statute, in case he assents, makes him also liable. He gives his consent, and thereby under the statute pledges his liability. The statute says to the assenting trustee, ‘ You may contract as many debts as you choose to become *281personally liable for.’” We think, under such circumstances, the directors in some sense became guarantors of the indebtedness of the corporation. In Barton v. Speis, 5 Hun, 60, this court held that, in an action against the maker and guarantor of a promissory note, the complaint setting out in a single count a good cause of action' against each, “aseparate demurrer by each defendant, on the ground of an improper joinder of causes of action, is proper, and should be allowed.” In delivering the opinion in that case at special term, which was approved by this court, I said: “Certainly the causes of action set out in the complaint here do not affect all the parties. The one against the maker does not affect the guarantor, and Dice Dersa. They are as independent as though upon separate notes,—one made by one defendant and the other by the other defendant. The allegations of the guaranty were not essential to a complete and perfect cause of action against the maker. The plaintiffs could maintain separate actions, and they are not entitled to maintain a joint action upon separate instruments.” We think the reasoning of that case applies here. A somewhat similar question was presented in Nichols v. Drew, 94 N. Y. 22, and in the opinion it is said: “But the objection is not for a misjoinder of parties. It is for a misjoinder of causes of action. Those arising on contract and affecting all the parties may be joined. Those arising on contract, but inconsistent with each other, or not affecting all the parties, cannot be joined, and the defect may be reached by demurrer. The general term was therefore right in its conclusion.” However, a majority of the court is of the opinion that the demurrer of the defendant corporation should have been sustained, and the demurrer of the other defendants overruled. Interlocutory judgment as to the appellants, other than the corporation defendant, affirmed, with costs, with leave to answer upon payment of costs of the demurrer and of this appeal. Interlociitory judgment as to the corporation appellant reversed, with costs, with leave to plaintiff to amend upon the payment of costs of the demurrer and of this appeal.

Merwin, J., concurs in result.

Dissenting Opinion

Martin, J.,

(dissenting.) As there is no demand for relief whatever against the corporation, I do not think the complaint can be regarded as a complaint against the corporation, and hence that there was no misjoinder of causes of action.