Jacobson v. Brooklyn Lumber Co.

• Decision Date: 27 February 1906
• Citation: 76 N.E. 1075,184 N.Y. 152
• Parties: JACOBSON et al. v. BROOKLYN LUMBER CO. et al.
• Court: New York Court of Appeals Court of Appeals

184 N.Y. 152

76 N.E. 1075

JACOBSON et al.

v.BROOKLYN LUMBER CO. et al.

Court of Appeals of New York.

Feb. 27, 1906.

Appeal from Supreme Court, Appellate Division, Second Department.

Action by Morris Jacobson and others against the Brooklyn Lumber Company and others. From a judgment for defendants (92 N. Y. Supp. 1130,101 App. Div. 609), plaintiffs appeal. Reversed.

Joseph M. Gazzam, Jr., for appellants.

George C. Case, for respondents.

CHASE, J.

The plaintiffs are minority stockholders of the defendant corporation. This action is brought by them on behalf of themselves and all other stockholders similarly situated to recover for the corporation from the individual defendants the amounts received by them for salaries as officersof the corporation from the year 1892, and to cancel any and all alleged resolutions on the books of the corporation purporting to authorize said individual defendants to credit themselves with certain amounts for accumulated or deferred salaries, and also to redress other alleged wrongs to the corporation. The issues were tried at Special Term, and a decision was rendered stating separately certain findings of fact and conclusions of law, upon which judgment was entered dismissing the complaint of the plaintiffs. An appeal was taken from said judgment to the Appellate Division, where the judgment was unanimously affirmed, and from the judgment of affirmance an appeal is taken to this court.

The findings of fact contained in said decision are disconnected and not sufficiently complete to present fully the appellants' contention, and plaintiffs insist that, notwithstanding the unanimous decision of the Appellate Division, this court should consider not only the facts as found in the decision, but also the facts which are admitted by the pleadings and the facts established on the trial by uncontroverted evidence. This action was decided after September 1, 1903, when the last amendment to section 1022 of the Code of Civil Procedure (chapter 85, p. 237, Laws 1903) took effect, but before the re-enactment of section 1023 of the Code of Civil Procedure (chapter 491, p. 1252, Laws 1904). The plaintiffs claim to be at some disadvantage because they did not have an opportunity to present to the court at Special Term a statement of the facts which they deemed established by the evidence and the rulings on questions of law which they desired the court to make, and they urge that there are therefore special reasons in this case why the court should examine the evidence to see whether there are facts not found in the decision, but which were established by uncontroverted evidence. It is provided by section 9 of article 6 of the Constitution of the state of New York as follows: ‘After the last day of December, one thousand eight hundred and ninety-five, the jurisdiction of the Court of Appeals, except where the judgment is of death, shall be limited to the review of questions of law. No unanimous decision of the Appellate Division of the Supreme Court that there is evidence supporting or tending to sustain a finding of fact or a verdict not directed by the court shall be reviewed by the Court of Appeals. * * *’ Section 191, Code Civ. Proc.

This court, in Hilton v. Ernst, 161 N. Y. 226, 55 N. E. 1056, say: ‘The facts as found are absolutely conclusive here. The appellants can neither add to them nor take from them by urging that, as a question of law, there are facts not found which rest on undisputed evidence, and facts found which are unsupported by any evidence.’ The court was then considering a case where a judgment had been entered upon a report of a referee, which stated separately his findings of fact and conclusions of law, and in which the judgment so entered had been unanimously affirmed in the Appellate Division. In Sweet v. Henry, 175 N. Y. 268, 67 N. E. 574, the court say: ‘This court is confined to the findings of fact and is not permitted to look into the record for additional facts.’ See, also, Rodgers v. Clement, 162 N. Y. 422, 56 N. E. 901,76 Am. St. Rep. 342, and National Harrow Co. v. Bement & Sons, 163 N. Y. 505, 57 N. E. 764.

The reasons why the court will not look into the record for additional facts have been heretofore fully stated, and such reasons do not permit of any exception to the rule by reason of the fact that the plaintiffs have not had an opportunity to obtain at Special Term a ruling upon additional facts which they deemed established by the evidence. The evidence, therefore, cannot be examined for the purpose of ascertaining whether there are facts established by uncontroverted evidence not included in the findings contained in the decision. The Constitution does not in terms or otherwise prohibit an examination of the pleadings to ascertain what facts are admitted thereby. It is provided by section 522 of the Code of Civil Procedure that ‘Each material allegation of the complaint, not controverted by the answer, and each material allegation of new matter in the answer, not controverted by the reply, where a reply is required, must, for the purposes of the action, be taken as true.’ The decision of the court or the report of a referee is required ‘upon the trial of the whole issues of fact.’ Code Civ. Proc. § 1022. It is commendable practice for the purpose of preserving a continuity of statement to include in the findings of fact a complete story of the transaction, so far as the same is material and can be given from the facts admitted in the pleadings or determined upon the trial of the whole issues of fact, but the statutes do not require findings of fact, except upon the issues tried.

It was held by this court, in Wiltsie v. Eaddie, 4 Abb. Prac. (N. S.) 393, that an exception does not lie to the report of a referee upon the ground that he has refused to find upon a question of fact other than one arising from the issues in the cause. Upon the facts alleged in the complaint which have not been controverted by the answer there is no issue. Findings are not necessary as to such facts in the determination of the issue. Bram v. Bram, 34 Hun, 487. In Eaton v. Wells, 82 N. Y. 576, this court, in considering an action brought for the foreclosure of a mortgage, say: ‘There was no need of proof of the amount of the debt aside from the averments of the pleadings. There was then no trial of an issue of fact. No findings of fact were needed, for there were no facts to be found. The pleadings contained them.’ When a complaint is dismissed before the introduction of testimony, it is a determination that the complaint does not state facts sufficient to constitute a cause of action, and in such case findings are not required. Neither does a case where judgment is rendered on the pleadings. Wood v. Lary, 124 N. Y. 83, 26 N. E. 338. It would seem therefore that there is no statutory provision requiring that findings be made by a court or referee to include the facts admitted by the pleadings. The pleadings are a part of the judgment roll, and the admissions therein can always be read in connection with the decision of the court or the report of the referee upon the issues, and they should be so read by this court to ascertain whether the facts so admitted and found sustain the judgment. This court has substantially so held in Rodgers v. Clement, supra, and we find no expression of the court that must necessarily be considered to the contrary. It is the evidence and the proceedings on the trial that the court will not examine to ascertain whether there are facts not found which rest on undisputed evidence or facts found which are unsupported by any evidence.

It is admitted by the pleadings that the defendant corporation was organized October 29, 1891; that the defendant Verity has at all times been its president, and the defendant Robertson its vice president; that since December 1, 1894, said Robertson has also been its treasurer; that said defendants Verity and Robertson have ever since the organization of the company been the owners of a majority of its stock and members of its board of directors; that there were originally five stockholders, all of whom were made directors of the company for the first year; that the plaintiff Arthur C. Jacobson was elected the first secretary and treasurer thereof; that the capital stock of the corporation is $50,000, and $44,400 thereof has been issued; that the stock is now all owned by the two plaintiffs and the two individual defendants, except five shares which are owned by a brother of the defendant Robertson; that on the 27th day of October, 1892, at a special meeting of the board of directors, a resolution was adopted removing the defendant Arthur C. Jacobson from his office as secretary and treasurer;...