New York, P.&B.R. Co. v. Dixon

• Decision Date: 16 April 1889
• Citation: 21 N.E. 110,114 N.Y. 80
• Parties: NEW YORK, P. & B. R. CO. v. DIXON.
• Court: New York Court of Appeals Court of Appeals

114 N.Y. 80

21 N.E. 110

NEW YORK, P. & B. R. CO.

v.DIXON.¹

Court of Appeals of New York, Second Division.

April 16, 1889.

Appeal from supreme court, general term, First department.

Appeal by the defendant, William P. Dixon, as assignee of Henry Morgan and Edward Morgan, and of the firm of M. Morgan's Sons, from a judgment entered upon an order made April 3, 1888, directing judgment in favor of plaintiff on a submission of a controversy without action on agreed facts. The statement of facts agreed upon and submitted was as follows: The New York, Providence & Boston Railroad, whose road extends from New London and Stonington, Conn., to providence, R. I., was incorporated by the legislature of the state of Rhode Island in June, 1832. Mr. Matthew Morgan, of New York, father of Henry and Edward Morgan, the above-named assignors, and founder of the firm of Matthew Morgan & Son, bankers, of New York, was the first president of the company, and that firm were its financial agents. After Matthew Morgan's death his sons continued the banking business, changing the firm name to M. Morgan's Sons, and one of them, Henry Morgan, the senior partner of the firm, in September, 1867, became treasurer of the railroad company, and continued to serve in that capacity, being elected year by year, until June, 1884; and the firm of M. Morgan's Sons continued to act as the financial agents, of the railroad company. They kept its transfer books, and paid all dividends to stockholders, and frequently were in advance to the company. Henry Morgan, who was one of the largest individual stockholders of the railroad company, served as treasurer of the railroad company, without salary, and the firm of M. Morgan's Sons neither charged nor allowed interest on the railroad company's account. The account itself on the firm's books was kept in the name of the New York, Providence & Boston Railroad Company, and on the books of the railroad company the account was kept in the name of M. Morgan's Sons. The railroad company did not keep an account in the name of Henry Morgan, treasurer. Remittances were at one time made to the order of the treasurer, but after December, 1880, at the request of Henry Morgan, (made because of expected absence,) the remittances were sent (though, so far as the minutes show, no action was taken by the board of directors on the subject) direct to the order of the firm of M. Morgan's Sons. The annual printed reports distributed to the stockholders of the railroad company stated the funds in the hands of M. Morgan's Sons. There was no statement showing funds in the hands of the treasurer. In June, 1884, the firm of M. Morgan's Sons failed, and made an assignment, without preferences. The individual members of the firm, Henry and Edward Morgan, at the same time made assignments, without preferences, of their individual estates. All the assignments were made to William P. Dixon. The books of the firm of M. Morgan's Sons show that at the time of the failure there was due to the railroad company the sum of $94,000. The debts of the firm of M. Morgan's Sons were large, and the creditors of the firm will receive but a portion of the amount due them The admitted debts of the individual members of the firm were small, and will be paid in full. The individual estate of Henry Morgan is sufficient to pay the amount due the railroad company in full, if, in the opinion of this honorable court, it should be decided that his individual estate is liable.

Wheeler H. Peckham, for appellant.

William Allen Butler, for respondent.

PARKER, J.

It appears from the books of M. Morgan's Sons, bankers, the financial agents of the New York, Providence & Boston Railroad Company, that in June, 1884, when the firm failed, and made a general assignment, without preference, for the benefit of creditors, it was indebted to plaintiff in the sum of $94,000. Henry Morgan, the defendant's assignor, was a member of the firm of M. Morgan's Sons. He also made a general assignment, without preference, of his individual property. The liability of the flrm to the plaintiff for the amount on deposit is unquestioned. That the balance of the estate of Henry Morgan, after the payment of his individual liabilities, must be applied in payment of the firm obligations, follows as a matter of law. The question now to be determined is whether or not Henry Morgan is also liable for such amount as treasurer of the plaintiff. There is no...