39 Barb. 140 | N.Y. Sup. Ct. | 1863
This action is brought by the plaintiff, as receiver, appointed in various actions against the Accessory Transit Company for the collection of debts due from the company. The first was in an action of the Pennsylvania Coal Company, commenced about the 30th of March, 1858, founded upon a judgment recovered on the 21st day of November, 1856, and setting forth the insolvency of the company, the issuing of an execution, and its return unpaid; that the company had a large amount of property in New York which could not be reached by execution, and praying that a receiver be appointed, and that judgment be rendered that the corporation be dissolved. This action was commenced' by service of the summons on the secretary of the company on the 27th of October, 1856. In May, 1858, an
The second was hy George Hussey and others, plaintiffs, against the Company, commenced in June, 1856, hy service of a copy of summons on the secretary, founded on a judgment recovered on the 20th of December, 1856; and in October, 1858, an order was entered for the appointment of a receiver, and the plaintiff was again appointed receiver in October, 1858.
The third was in an action by Edward M. Robinson and others v. The Accessory Transit Company, commenced in May, 1858, founded upon a judgment recovered December 20, 1856, in an action commenced in November, 1856, by service of summons on the secretary of the company. In this action the defendants appeared by attorney, and on the 27th of December, 1858, the plaintiff was appointed receiver.
The fourth was in an action by James S. Sandford and others v. The Accessory Transit Company, commenced in " October, 1858, founded upon a judgment recovered the second of December, 1856, in an action commenced on the 10th of November, 1856, by service of summons on the secretary of the company.
On the 6th of November, 1858, an order was made for the appointment of a receiver, and on the 18th of January, 1859, the plaintiff was appointed receiver. Subsequently other actions were brought and judgments recovered, and similar orders were made appointing the plaintiff as such receiver. In December, 1858, an action was commenced by George C. Anthon, a stockholder of the company, in behalf of himself and all other stockholders of the company, setting out the recovery of the judgments; the insolvency of the company; that the company had property in the state ; that the state of Nicaragua had by a decree dated 18th of February, 1856, professed to annul and revoke the charter, and had taken possession of the property of the company, and asking the
On the 27th of January, 1859, the plaintiff obtained leave to bring this action. In his complaint the receiver sets up his title under the judgments before stated, and' under the assignment, and avers that the company was incorporated under the laws of Nicaragua, and had an office for the transaction of business in New York. That prior to January, .1856, the company was engaged in a profitable business in transporting passengers and freight across the isthmus of Nicaragua, and to New Orleans and elsewhere. That the company owned large and valuable steamers and lake boats, and other property necessary for such business. That the value of the property was large, and its business was profitable. That on the 3d of January, 1856, the defendant was appointed general agent of the company, and on January 30, 1856, was elected president of the company. That on February 18, 1856, a decree was issued by Eivas, claiming to be the president of the state of Nicaragua, under which decree the property of the company on the isthmus-was seized and taken from the company, and its operations from that time suspended. That in March, 1856, further powers were conferred upon the defendant as agent and president, to do all such acts as were necessary to extricate the company from its difficulties and restore its rights. That under such agreement the defendant made a contract with
The defendant in his answer denies the right of the plaintiff to maintain this action, and his authority to act as receiver, as well as the various charges made against him in the complaint. He claims the subsidy as belonging to himself and not to the company, and alleges that he has fully accounted to the company. He also denies all frauds, as alleged in the complaint, and insists, as, a defense, that there is a defect of parties to the present action.
The question which is raised as to the plaintiff’s title, was made when the plaintiff rested, on a motion to dismiss the complaint, and was again renewed at the close of the case,
In regard to the proceedings by a "stockholder to wind up the affairs of the company, no such power can be exercised over a foreign corporation. The only provision of our laws in regard to such proceedings against corporations limits them to corporations incorporated by a law of this state, and there is no provision by which a 'stockholder can thus proceed in this state against the corporations ‘ incorporated by other states. But for the purpose of preserving the property for the benefit of creditors or stockholders, I think a court of equity has ample power to take charge of it and to appoint^ a receiver. This undoubtedly is the rule in regard to domestic corporations, independent of any statutory provisions.". Such was the case in Lawrence v. The Greenwich Fire Insurance Co., (1 Paige, 587.) There the bill alleged that the corporation was dissolved, and hall no officers to attend to its concerns. The chancellor said “ it was evident there was no person authorized to take charge of, or to conduct the affairs of the corporation. Under these circumstances, it was proper to appoint a receiver to take charge of the" effects of the company and preserve them for the benefit of the stockholders generally.” The amendment of the 244th section of the code, applying the appointment of receiver
Although, therefore, in the proceeding by Anthon as a stockholder, the plaintiff may have asked for a greater relief in the complaint than could be granted, still he showed facts eúough to warrant the appointment of the receiver, and the taking possession of the property to preserve it for the benefit of those entitled thereto. It is, however, immaterial whether or not the suit of Anthon against the Accessory Transit Company was one which could be maintained or which could give the court jurisdiction to appoint a receiver. The other actions were commenced for the recovery of debts ; the summons in each case was served in the manner prescribed by law, and under the decision before referred to, whatever may be my individual' opinion on this question, I must hold that the company was not so deprived of existence J by the decree of the Nicaragua government as to make the ! service of process on its officers void.
Independent of this service, in some of the cases the defendants appeared by officers of this court, and such appearance would be valid and give jurisdiction, whether the service was good or not, if we are to regard the corporation as still in existence, notwithstanding the decree of February, 1856.
The plaintiff's title also rests upon an assignment made to him by the supposed officers of the company, as such receiver, under • an order of the court directing such assignment. I cannot, however, under the evidence in this case, consider that instrument as having any validity from its execution. This assignment was dated on the 18 th of January, and executed on the 19th of January, 1859, and purported to have "been signed by Cross as president and Wardell as secretary, and the execution appears to have been proven by Gross.' The seal affixed to the instrument was the seal of the company, and the commissioner certifies, that Cross testified that
The evidence shows that after the decree of the Nicaragua government, taking away the charter, in February, 1856, there were two elections of directors or officers, one on the 5th of May, 1856, and one on the 4th of May, 1857, when Cross was elected president from the 1st of June, 1857. From that time he commenced to act, and appears to have been considered by strangers as the president. But there was no proof of any authority being given to execute the paper, and his testimony conclusively shows that he had no specific authority from the company to execute any assignment, even if under the circumstances he should be recognized as the president. The affixing of the seal of the company, which in fact was the real execution of the paper, if it was execxxted, was also without authority. There could be no authority given, because there was no meeting of the board for that purpose. The seal was found attached to the press, and the testimony shows it had been sold by the sheriff, so attached with the press, and bought in by Mr. Ci’oss. Such a transaction can never be considered to be a proper execution of a sealed instrument by a coi'poration; and the want of authority on the part of the officers cannot be cured by any proof of execution made befoi’e the commissioner. Oi'oss states that no such pi'oof was furnished, and there is no evidence to the contrary, except the commissioner’s certificate. I consider this assignment as invalid, and executed without authority. It therefore confers no title on the receiver, if he did not obtain such title by virtue of his appointment as such in the actions before referred to.
I will now examine the vaxdous claims set up by the plaintiff, for which he asks a judgment directing an accounting against the defendant.
1st. The plaintiff, as receiver, claims to recover against the - defendant for moneys received by him from the Pacific Mail .
Without specially recapitulating the testimony in reference to this part of the case, I think the whole of the evidence, taken together, shows the intent of the parties making the agreement at that time was, that the subsidy should go to the benefit of the Transit Corn]) any. The testimony J of Mr. Aspinwall shows' that such was his understanding of the ‘ agreement. This is confirmed by Mr. Chauncey, who was present, and who says the payment was to be for withdrawing the ships of the Transit Company. Some of the receipts given for the-first payments, signed by Mr. Allen, prior to the 11th of J une, purported to be for money due the Accessory Transit Company. The receipt given.on the 11th June, signed by the defendant, was for money due the Accessory Transit Company. The fact that the vessels of the company were laid up after the agreement, and the directions given to Templeton, the agent at New Orleans, to that
I think much more reliance may, and should be placed on the documentary testimony, which is not liable to be altered by failure of memory or misunderstanding of witnesses. Down to the period, then, when the first contract was terminated by the Morgan & Garrison line, and when the Pacific Mail Steamship 'Company refused to pay, I am of the opinion that the contract was made for the company; that the defendant was bound to account to the company therefor, aná if there are any moneys remaining unpaid to the time of the receipt of 11th of June, 1856, the plaintiff is entitled to an
An objection isj^aken to this claim on the ground that the contract was immoral and could not be enforcedthat being in restraint of trade and commerce, the court shduld riot sustain it, but should leave the parties as the law. found them, both being in pari delicto. That this rule would apply if the action was brought by the plaintiff or by Vanderbilt against the Pacific Mail Steamship Company, I have no doubt. The law would not enforce such a contract against the delinquent party; or if the money had been paid/the law would not enable the party paying to recover it back, but would leave them as they placed themselves in carrying out the agreement, viz: to act upon it as a mere honorary arrangement among themselves with which the law could have nothing to do. But does such a rule apply to a principal and his agent who has received money for his principal on such an agreement ? The money has .been paid to an agent for his principal by a party who could not have been compelled to make such payment. But having been paid voluntarily, it becomes the property of the principal in the agent’s hands for which he should account) he has no right to refuse payment to his principal because his principal had not a legal claim for the money on the agreement. So far as there was a contract between the Transit Company and the defendant, the contract was legal. He was to receive moneys for them and pay over to the company. An agent has no right to'dispute the title of his principal to -moneys received by him for the principal’s use. Hor has he a right to resist an action for the amount so received on the ground that the money was paid on an illegal contract between the original parties. This was so held in Tenant' v. Elliott, (1 B. & P. 3;) and in Farmer v. Rus
2d. After the making of the original contract or agreement with the Pacific Mail Steamship Company, payments were regularly made till about 11th of June, 1856; and some payments for trips on the other side were made afterwards. About that date the Pacific Mail Steamship Company refused to pay, on account of the running of an opposition line from Hew. York by Morgan & Garrison. Previous to this date the act of the Bivas-Walker government in taking away the charter had gone into effect. Under it the property of the Transit Company, which was in Central America, had been taken possession of by agents appointed by that government. The defendant had made exertions both at Washington and in Central America to obtain a restoration to the company of its rights and property. These efforts had proved fruitless. The route had passed from the Transit Company into the control of Morgan & Garrison, on or before the month of April, 1856.
*3d. The subsequent agreements made in June, 1857, and in J uly, 1858, were of course of the same character, and intended for the individual benefit of the defendant, and not for the use of the company. The means, condition and prospects of the company having at those times become in a much worse condition than previously, and any prospect that might have been before entertained of its restoration having utterly failed, the defendant had been authorized by a resolution of the board to sell all of the steamers of the company for the purpose of paying their indebtedness. The question then arises whether the defendant bore such a relation to the Transit Company at this time as prevented him from making this agreement for his own benefit, and whether any rule of law exists, by which he can be compelled to account to the company for the moneys received by him under this agreement. The defendant had been the agent of the Transit Company previous to the 1st of June, 1856, under a resolution passed 3d J anuarv, 1856. This agency, by the resolution and by the agreement between the defendant and the company, terminated at that time, and there is no evidence to show its renewal. He had become a large creditor of the company by advances, and had liens on all the vessels of the company as
It may well be doubted whether the terms of this agreement were at all within the bounds of the agency. The object of the charter of the company was to run vessels to the isthmus and back, not to make money by agreeing not to run. The duties of the president were only in furtherance of the objects of the charter. An agreement on his part not to run a line himself would have been to the benefit not the injury of the company if they had the means and power to continue
4th. The plaintiff also claims an accounting for steamships sold by the defendant for the account of the company. These vessels were all mortgaged to the defendant for advances made by him to the company and for bonds held by him against the
There is nothing in the evidence which would warrant the opening of the other accounts for the sale of the steamers, except that relating to the sale to William H. Vanderbilt. The other vessels appear to have been fairly sold, at a price not below their value in the condition and under the circumstances in -which they were sold; and the proceeds of the sale have been accounted for to the company, and such account acquiesced in.
As to the sale of the steamers Pacific, Cortes and Uncle Sam to William H..Vanderbilt, I do not think it was such a sale as can, under the circumstances and relations of the parties, be sustained. The purchaser was his son, totally unacquainted with their value, -having no occasion for the purchase. He paid no money therefor, but gave his note to the defendant, payable in a year. The defendant paid all expenses, and kept the control and management of the vessels. William does not appear to have been interested in the accounts or management of the vessels, but left all in the charge" of the defendant. The defendant ran the vessels in an opposition line on the Pacific. He does not appear to have accounted or allowed for the use of them. He says he has not paid William any thing on account of them since the sale. Ho account has ever been rendered of these vessels by the defendant to William, nor has it ever been shown that any account between William and the defendant exists in regard to'them. The negotiations for the supposed sale also, were such as to throw great doubt on the bona jfides of the
The appraisement of the Daniel Webster, and the appropriation by the defendant of that vessel to his own use at the appraised value, can hardly be considered within the powers conferred upon him by the resolution authorizing the sale. Had such appraisement been submitted to the company, and their assent hy resolution obtained, the case would be a different one. But the company was no party to the transaction. They had nothing to do with the selection of the appraisers, nor were they consulted by the defendant as to the appropriation and use of the steamer by himself. The bill of sale, purporting to have been executed by the Transit Company to the defendant, for the Daniel Webster, dated the 18th November, 1856, is not entitled to consideration in connection with this branch of the case, because there was no warrant for any such bill of sale in the proceedings of the company, and no resolution appears on the minutes of the company, at any time, authorizing such a sale to the defendant. The same remark may be made as to various other
The sale of the coal, hulks, &c. on the Pacific to William H. Vanderbilt, is subject to the same objections, and the same.rule must be applied as that in regard to the steamers, and the same accounting therefor is ordered.
The necessity of accounting as to these vessels renders it unnecessary to examine the items for repairs on them, which were charged to the company for work done after the supposed sales. As they are to be credited to the defendant in the accounting, the charges in the accounts can remain.
The charge of $1000, for money paid to Mrs. Cazneau, does not appear to have been twice charged in the accounts of the defendant against the company. At folio 732 of Lea’s testimony, there is a charge for money advanced for secret service, of $1000, and at folio 755 there is a charge for the like purposes of $16,180, as per account of that date on file. These items together amount to $17,180. On referring to that account, it will be found that the items there charged are the same, with a slight variation. The sum of $1000 in the first charge appears to have been deducted from the gross amount, and the second charge is for the balance only.
There is some evidence that the defendant, when he paid General Goicouria for secret service money, took from him one or more notes for the amount advanced.
Those notes if of any value would be the property of the
The defendant objects to, any recovery in this case upon the ground that the republic of Nicaragua, the commissioners appointed by that government on the repeal of the charter, the Transit Company, 'its stockholders and creditors, or some of them are necessary parties to this action. The receiver in this matter takes the place of the company. There could be no pretense that the company, if in existence at all, could not collect a debt due to it by action, without making any of the other persons parties. If any of those named have claims against the funds and property of the company, they can enforce such claims by affirmative action, but in the collection of debts due the company there is no propriety of involving them in such a litigation. There is no validity in this objection.
The judgment rendered must be for an accounting by the defendant —
First. For moneys received by him from the Pacific Mail Steamship Company prior to August, 1856, excepting the money receipted for on the 8th of July, 1856.
Second. For the proceeds of the Brother Jonathan.
Third. Declaring the sale to William H. Vanderbilt to have been for the benefit of the defendant, and directing an accounting by the defendant for the moneys received by him for the proceeds of such vessels when subsequently sold by him.
Fourth. For the Daniel Webster,, for the value of such 'steamer at the time she was taken by the defendant.
Fifth. For the proceeds of sales made by the defendant of the coal, coal-hulks, &c. on the Pacific coast, or for the'value thereof, if used by him.
Sixth. For any notes received by the defendant from General Goicouria for the moneys advanced to him by the defendant and charged in the account for secret service money
Ingraham, Justice.]
In taking such accounts it will not be necessary to open the other accounts rendered, or to direct any re-accounting as to all other items of account between the defendant and the company.
The defendant is to be allowed in his accounting for the steamships, all moneys expended for such steamships, and for repairing the same, up to the respective times of sale.
He is also to be allowed any.moneys remaining unpaid of the advances by him on account of the company, for which he had a lien on those vessels, and any balance of money due from the company for the bonds held by the defendant, for which the steamships were pledged or mortgaged, and which was not discharged by the sale of the other steamships than those for which he is to account. Wherever any such items have been included in the accounts heretofore rendered, they are not to be charged again to that company.
For the purpose of taking such account, a reference is ordered, and all further directions are reserved until the coming in of the report.