147 N.Y. 241, Sage v. Culver

Citation:147 N.Y. 241
Party Name:HENRY W. SAGE et al., Respondents, v. ANDREW R. CULVER et al., Appellants.
Case Date:October 15, 1895
Court:New York Court of Appeals

Page 241

147 N.Y. 241

HENRY W. SAGE et al., Respondents,

v.

ANDREW R. CULVER et al., Appellants.

New York Court of Appeal

October 15, 1895

Argued October 8, 1895.

Page 242

COUNSEL

George W. Wingate for appellants. None of the allegations stated in the complaint as to the actions of defendants Culver and Washington constitute a cause of action. ( Clark v. Dillon, 97 N.Y. 373; Marie v. Garrison, 83 N.Y. 15; Masterson v. Townshend, 123 N.Y. 461; Coffin v. G. R., etc., Co., 18 N.Y.S. 787; Thomas v. M. M. P. Union, 121 N.Y. 51; Thomas v. N.Y. & G. L. R. R. Co., 139 N.Y. 163; Williams v. Ingersoll, 89 N.Y. 508.) The fact that Culver and Washington, while officers of the corporation, have dealt with it does not authorize a stockholder to sue them for an accounting in the absence of an allegation of fraud. ( Union Pacific v. Credit Mobilier, 98 U.S. 569; Gamble v. Q. C. W. Co., 123 N.Y. 91; In re State Reservation, 122 N.Y. 177; Beveridge v. N.Y. E. R. R. Co., 112 N.Y. 1.) The refusal by the defendants to permit the plaintiffs to examine the books and papers of the company does not authorize this action for an inspection and accounting. ( Regina v. M. M. Co., 1 El. & El. 289; Cotheal v. Brown, 5 N.Y. 562; In re Martin, 62 Hun, 557; 133 N.Y. 692; In re Sage, 70 N.Y. 220; Laws of 1892, chap. 2, § 29; High on Injunctions, chap. 1, § 29; McLaury v. Hart, 121 N.Y. 642.) Even if it should be admitted that the plaintiffs as stockholders had the right to examine at will all the books and papers of this corporation, and that the refusal of its officers to permit this examination was improper; yet even this would not authorize the present action, which in form is for an accounting. ( People v. Throop, 12 Wend. 185; In re Sage, 70 N.Y. 220; People v. L. S. & M. S. R. Co., 11 Hun, 1.) A demand by an attorney to be shown the books is insufficient as a foundation for a mandamus. ( People v. U.S. M. R. Co., 20 Abb. [ N. C.] 192.) The great

Page 243

length of time which has elapsed since the transactions complained of is a bar to the prosecution of an action for equitable relief. ( Sullivan v. Portland, 94 U.S. 811; Calhoun v. Millard, 121 N.Y. 69; Dimpfell v. O. & M. R. R. Co., 110 U.S. 209; Foster v. M. R. R. Co., 146 U.S. 88; Johnston v. S. M. Co., 148 U.S. 360; Kirby v. L. S. & M. S. R. R. Co., 120 U.S. 130, 139; Miller v. Wood, 116 N.Y. 350; Carr v. Thompson, 87 N.Y. 160; Allen v. Wilson, 28 F. 677; Kent v. Q. M. Co., 78 N.Y. 159; Barr v. N.Y. L. E. & W. R. R. Co., 125 N.Y. 263; Spiedel v. Henrici, 120 U.S. 377, 387; Humbert v. Trinity Church, 24 Wend. 587, 595; 7 Paige, 195; Fogg v. Price, 145 Mass. 513; Selover v. Coe, 63 N.Y. 439; Harwood v. R. R. Co., 84 U.S. 78; T. L. O. Co. v. Marbury, 91 U.S. 587.)The complaint is demurrable because it fails to allege that plaintiff brings this suit on behalf of himself and all others similarly situated; that he has made application to the corporation to bring the suit, and that they have refused to do so. These assertions are indispensable to establish a cause of action. ( Brinckerhoff v. Bostwick, 88 N.Y. 52, 60; Greaves v. Gouge, 16 Abb. Pr. 377; 69 N.Y. 156; Hawes v. Oakland, 104 U.S. 450; Porter v. Sabin, 149 U.S. 478; Davenport v. Dows, 18 Wall. 626; U.S. v. U. P. R. Co., 98 U.S. 610; Smith v. Hurd, 12 Metc. 371; Craig v. Gregg, 83 Penn. St. 19; Allen v. Curtis, 26 Conn. 456; Howe v. Barney, 45 F. 668; Hirsh v. Jones, 56 F. 137; Dewing v. Perdicaries, 96 U.S. 198; Wallace v. Bank, 89 Tenn. 630; McMullen v. Ritchie, 64 F. 262; Wertheim v. Page, 10 Wkly. Dig. 26; 84 N.Y. 674.)

William C. De Witt for respondents. When a trustee deals with himself he is bound to explain his transactions to the cestuis que trust; and, it appearing that the defendants Culver and Washington, as officers of the corporation, have paid to themselves, as for a debt, at least $250, 000 out of the treasury of the corporation; have concealed the origin and nature of this debt; and, when driven to explain, have made

Page 244

false statements; and it further appearing that such officers have been constantly in receipt of large revenues from the corporation in the character of officers of another corporation, and as part owners of other properties, the right of the plaintiffs to an accounting and relief in equity is supported by the strongest principles of law and justice. (3 Greenl. on Ev. § 253; Cowee v. Cornell, 75 N.Y. 100; Crowe v. Ballard, 1 Ves. 221, n. 2; Gibson v. Jeyes, 6 Ves. 278; Montesquieu v. Sandys, 18 Ves. 301, n.; Harris v. Temenheere, 15 Ves. 40; Jones v. Thomas, 2 Y. & C. 498; Mechond v. Girod, 4 How. [U. S.] 553; Butts v. Wood, 38 Barb. 189; Ang. & Ames on Corp. [ 3d ed.] 258, 260, 304, 305; Robinson v. Smith, 3 Paige, 232; C. C. Co. v. Sherman, 30 Barb. 562, 568; Ogden v. Murray, 39 N.Y. 207; Story's Eq. Juris. § 466; Hill on Trustees, 535; A. R. Co. v. Blaikie, 30 Barb. 571; Gardner v. Ogden, 22 N.Y. 332; Butts v. Wood, 37 N.Y. 317.) It is the case of shareholders claiming that they have been wronged and damaged in their individual interests and property by the unlawful acts of officers having exclusive control of the corporation (in fact by the corporation itself), and seeking equitable redress. Such an action has always been maintainable in equity. ( Barr v. N.Y. L. E. & W. R. R. Co., 96 N.Y. 444; Dodge v. Woolsey, 18 How. [ U. S.] 331, 341; Leslie v. Lorillard, 110 N.Y. 519; Hawes v. Oakland, 104 U.S. 450, 460; Ziegler v. Hoagland, 52 Hun, 385; Gray v. N.Y. & V. S. Co., 3...

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189 practice notes
  • 100 N.E. 675 (Ind. 1913), 22,328, The Domestic Block Coal Company v. Dearmey
    • United States
    • Indiana Supreme Court of Indiana
    • 22 Enero 1913
    ...so impliedly averred will be given the same force as if directly stated. Baylies, Code Pl. and Pr. (2d ed.) § 3; Sage v. Culver (1895), 147 N.Y. 241, 41 N.E. 513; Williamson v. Yingling (1884), 93 Ind. 42, 44; Vance v. Schroyer (1882), 82 Ind. 114, 117; French v. Howard (1860), 14 Ind. 455;......
  • 164 N.Y. 171, Carpenter v. Taylor
    • United States
    • New York New York Court of Appeals
    • 2 Octubre 1900
    ...to be trusted. (Perry on Trusts, § § 129, 196, 209, 427; Page 179 Munson v. S., G. & C. R. R. Co., 103 N.Y. 58; Sage v. Culver, 147 N.Y. 241; McClure v. Law, 161 N.Y. 78.) The plaintiff held all of the assigned property in trust, first for the benefit of creditors, and the surplus, if a......
  • 184 N.Y. 152, Jacobson v. Brooklyn Lumber Co.
    • United States
    • New York New York Court of Appeals
    • 27 Febrero 1906
    ...other stockholders to avoid the transaction and compel a re-payment of the money. (Butts v. Wood, 37 N.Y. 317; Page 155 Sage v. Culver, 147 N.Y. 247; A. H. G. M. Co. v. Andrews, 120 N.Y. 58; Copeland v. J. Mfg. Co., 47 Hun, 236; E. N.Y. R. R. Co. v. Elmore, 5 Hun, 214; Coleman v. S. A. R. R......
  • 212 N.Y. 121, Godley v. Crandall & Godley Co.
    • United States
    • New York New York Court of Appeals
    • 9 Junio 1914
    ...illegal. ( Billings v. Shaw, 209 N.Y. 265; Butts v. Wood, 37 N.Y. 317; Metropolitan El. R. Co. v. Kneeland, 120 N.Y. 134; Sage v. Culver, 147 N.Y. 246; Erwin v. Nav. Co., 27 F. 625; Jacobson v. B. L. Co., 184 N.Y. 152; A. H. M. & M. Co. v. Andrews, 120 N.Y. 58; Pollitz v. W. R. R. Co., ......
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189 cases
  • 100 N.E. 675 (Ind. 1913), 22,328, The Domestic Block Coal Company v. Dearmey
    • United States
    • Indiana Supreme Court of Indiana
    • 22 Enero 1913
    ...so impliedly averred will be given the same force as if directly stated. Baylies, Code Pl. and Pr. (2d ed.) § 3; Sage v. Culver (1895), 147 N.Y. 241, 41 N.E. 513; Williamson v. Yingling (1884), 93 Ind. 42, 44; Vance v. Schroyer (1882), 82 Ind. 114, 117; French v. Howard (1860), 14 Ind. 455;......
  • 164 N.Y. 171, Carpenter v. Taylor
    • United States
    • New York New York Court of Appeals
    • 2 Octubre 1900
    ...to be trusted. (Perry on Trusts, § § 129, 196, 209, 427; Page 179 Munson v. S., G. & C. R. R. Co., 103 N.Y. 58; Sage v. Culver, 147 N.Y. 241; McClure v. Law, 161 N.Y. 78.) The plaintiff held all of the assigned property in trust, first for the benefit of creditors, and the surplus, if a......
  • 184 N.Y. 152, Jacobson v. Brooklyn Lumber Co.
    • United States
    • New York New York Court of Appeals
    • 27 Febrero 1906
    ...other stockholders to avoid the transaction and compel a re-payment of the money. (Butts v. Wood, 37 N.Y. 317; Page 155 Sage v. Culver, 147 N.Y. 247; A. H. G. M. Co. v. Andrews, 120 N.Y. 58; Copeland v. J. Mfg. Co., 47 Hun, 236; E. N.Y. R. R. Co. v. Elmore, 5 Hun, 214; Coleman v. S. A. R. R......
  • 212 N.Y. 121, Godley v. Crandall & Godley Co.
    • United States
    • New York New York Court of Appeals
    • 9 Junio 1914
    ...illegal. ( Billings v. Shaw, 209 N.Y. 265; Butts v. Wood, 37 N.Y. 317; Metropolitan El. R. Co. v. Kneeland, 120 N.Y. 134; Sage v. Culver, 147 N.Y. 246; Erwin v. Nav. Co., 27 F. 625; Jacobson v. B. L. Co., 184 N.Y. 152; A. H. M. & M. Co. v. Andrews, 120 N.Y. 58; Pollitz v. W. R. R. Co., ......
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