85 N.Y.S. 153 | N.Y. App. Div. | 1903
The complaint, which is quite voluminous, contains six separate causes of action. To it the defendants interposed a joint demurrer, one of the grounds being that causes of action have been improperly united. This demurrer was overruled by the Special Term, and from the judgment entered thereon the defendants appeal.
For a first cause of action the complaint alleges that the Anglo-American Savings and Loan Association was a domestic corporation formed in or about the month of November, 1890, under and pursuant to chapter 122 of the Laws of 1851, as amended; that .such association continued in business until its dissolution on or about the 7th day of January, 1901; that the defendants James, Yermeule and Hard were directors of the said association during the years 1895 to 1900, both inclusive; .that the defendants Lounsbury and Gerding were directors of the said association from the year 1896 to 1900, inclusive ; that the defendant Thompson was a director from 1898 to 1900, inclusive; that the defendant Gilbert was a director from 1895 to 1900, inclusive; that the defendant Pearce was a clerk and employee of the, board of directors from the year 1895 to 1900, inclusive, and during the year 1899 was a director; that the defendant Matlock was a clerk and employee of the board of directors of
For a secoiid cause of action the plaintiff repeats the allegations as to the character of the representations made, and alleges that on the 14th day of May, 1898, he deposited for his two children with the association $554, and 'subsequently made additional deposits for his- children; that such deposits had been, assigned to the plaintiff.
For a third cause of action the complaint-alleges that on the 27th day of June, 1899, the plaintiff made for his wife a deposit of $5,236; and that such deposit was.duly assigned to the plaintiff.
For a fourth cause of action the plaintiff alleges that at three dates, two in the year 1895, and otie in the year 1899, he made deposits of moneys for one Cartwright, aggregating $3,430; that
For a fifth canse of action the plaintiff alleges that on May 22, 1897, Mary Ellen Mee and Sarah Ann Mee, relying upon the said statements and representations, made deposits with the said corporation aggregating $155, which were prior to the commencement of the action assigned to the plaintiff.
For a sixth cause of action the complaint alleges that in the years 1898, 1899 and 1900 one Hoddick, of Buffalo, made deposits of money with the corporation, believing the said representations to be true, aggregating $836, which was assigned to the plaintiff; and the plaintiff demands judgment for these several sums so deposited, with interest.
The causes of action thus alleged áre based upon the fraud of the defendants in issuing false and fraudulent representations as to the condition of the association which induced the plaintiff and the' other persons mentioned to deposit money with the company; and seeks' also to hold the officers and directors of the company who became such subsequent to- the date of such deposits, upon the ground that by virtue of such subsequent fraudulent representations the plaintiff and those for whom he acted were induced to refrain from withdrawing the deposits made with the corporation. Some of the defendants were not directors of the corporation at the time the deposits were made, and their responsibility for those statements made subsequent to the deposits is based upon the allegation that they were made for the purpose of inducing the plaintiff not to withdraw the deposits while the corporation was solvent. The demurrer is joint, and, therefore, if a cause of action is alleged against either of the defendants, the court below was justified in refusing to sustain the demurrer, so far as it is based upon the ground that the complaint fails to allege facts sufficient to constitute a cause of action. We think that the allegations are sufficient to sustain a cause of action for deceit, and that upon that ground the defendants were not entitled to have this joint demurrer sustained.
A different question is presented,- however, as to the ground of demurrer that causes of action are improperly united. • Assuming that there could be a cause of action for the damages sustained by
This action illustrates the necessity of such a rule. Here certain of the defendants are alleged to have been directors' of the associa- ' tion in the years 1895 to 1900, inclusive, when these deposits were made, and these deposits were alleged to be based upon and induced by certain fraudulent misstatements by the directors then or prior to that time in office. If the plaintiff was entitled to recover from those directors the amount that he then deposited which was induced by fraud and fraudulent misstatements of the condition of the company, he would have no cause of action against .the other defendants who subsequently became directors; and yet if he succeeded in obtaining a judgment against the defendants, those who became officers or directors subsequent to the deposit would be made responsible for the frauds with which they were not connected: It is not alleged-that these defendants who became directors in the company
The case of Lincoln v. Claflin, (7 Wall. 132), relied upon by the plaintiff, does not sustain this complaint. In that case the plaintiffs brought an action against the defendants for fraudulently obtaining the property of the plaintiffs, alleging a combination and prearrangement between them, by which Mileham, one of the defendants, purchased goods to a large amount, of different parties, upon false and fraudulent representations of his means and business, and that Lincoln, the other defendant, sold them at St. Louis within a few days afterwards at auction for less than their cost price, and appropriated the proceeds to his own use; the whole thing being alleged to have been done with intent to defraud the vendors of their
Here there is no allegation that Lounsbury and Herding had any participation in. or knowledge of the fraud committed by the officers of this corporation during the year 1895, when they issued the statements in relation to the corporation of that year, and by which the plaintiff claims that he was induced to make his first deposit; and there is nothing alleged that connects them with the fraud committed by the directors in that year. The allegation in the 14th paragraph of the complaint that during the years 1896 to 1897, both inclusive, the defendants who were the directors in in the year 1895, and the defendants Lounsbury and Herding and others “ confederated and conspired together for the purpose of conducting the business of the said .Anglo-American Savings and Loan Association of New York in a manner contrary to and forbidden by its articles of association,” does not in any way connect Herding and Lounsbury with the acts of the directors in the year 1895; nor does the 24th paragraph of the complaint allege that the defendants Lounsbury and Herding had any knowledge of the annual statements for the year 1895, when they were not connected with the corporation. The same may be said of paragraph 30 of the complaint.
It follows that the judgment appealed from must he reversed, with costs, and the demurrer sustained, with costs, will leave to the plaintiff to amend upon payment of costs in this court and in the court below.
Van Brunt, P. J.,. O’Brien and McLaughlin, JJ., concurred.
Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend upon payment of costs in this court and in the court below.