99 N.Y. 185, Brinckerhoff v. Bostwick

Citation:99 N.Y. 185
Party Name:THEODORE BRINCKERHOFF et al., Appellants, v. HENRY BOSTWICK et al., Respondents.
Case Date:May 08, 1885
Court:New York Court of Appeals

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99 N.Y. 185



HENRY BOSTWICK et al., Respondents.

New York Court of Appeal

May 8, 1885

Argued April 24, 1885.

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E. A. Brewster for Theodore Brinckerhoff, appellant. Every statute must be construed to act prospectively and not retroactively, unless its terms express a different intent. ( N.Y. & O. R. Co. v. Van Horn, 57 N.Y. 473; Goillotel v. Mayor, etc., 87 id. 441.) The words of section 414 of the Code, 'the provisions of this chapter apply and constitute the

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only rules of limitation,' though absolute in themselves, are qualified and restricted by sections 393 and 394, which provide that chapter 4 shall not apply to certain specified actions. ( Smith v. People, 47 N.Y. 330; 84 id. 565.)The statute of limitations did not begin to run in favor of the defendants until they handed over the bank to the receiver (January 31, 1877), and ceased to act as directors. (2 Perry on Trusts, § 863; Costar v. Murray, 5 Johns. Ch. 525; Purdy v. Sistare, 2 Hun, 126; Reitz v. Reitz, 80 N.Y. 538; Mabie v. Benley, 95 id. 206; Matter of Neilly, id. 382; Robinson v. Smith, 3 Paige, 222; Greaves v. Gouge, 69 N.Y. 154; Brinckerhoff v. Bostwick, 88 id. 52.) The commencement of the action by Brinckerhoff on behalf of all the stockholders arrested the running of the statute against all the stockholders. ( Brinckerhoff v. Bostwick, 88 N.Y. 52; Robinson v. Smith, 3 Paige, 222.)

O. D. M. Baker and John F. Schlosser for W. E. Brinckerhoff et al., appellants. The relation between defendants and the stockholders was that of trustee and cestui que trust. ( Kane v. Bloodgood, 7 Johns. Ch. 129; Robinson v. Smith, 3 Paige, 222; Butts v. Wood, 37 N.Y. 317.) So long as the trust continued, no cause of action against the defendants accrued. (Perry on Trusts, § 863; Story's Eq. Jur., § § 1520-21; Angel on Lim., § § 166, 468; Kane v. Bloodgood, 7 Johns. Ch. 90; Edwards v. Warden, L. R., 1 App. Cas. 281; Bacon v. Rives, 106 U.S. 99; Reitz v. Reitz, 80 N.Y. 538.) The stockholders had no right of action against the defendants, before the refusal by the receiver to bring suit against them. ( Greaves v. Gouge, 69 N.Y. 155; Taylor v. Bowker, 111 U.S. 110.) It was not intended to enlarge the scope of the act of 1849, to apply to any liability not created by some act applicable to moneyed corporations. ( Dominick v. Michael, 4 Sandf. 374; Crowell v. Crane, 7 Barb. 191; Douglass v. Douglass, 5 Hun, 140.) The expression 'created by law' relates to a liability -- created -- caused to exist -- by some statutory enactment, and limits, qualifies and defines the

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kind of liability intended. ( In re N.Y. & B. B., 72 N.Y. 527; Code, §§ 1775, 1784, 1785, 1797, 1798, 1812; Brennen v. Mayor, 1 Hun, 315; Green v. Clark, 13 Barb. 57; Oakley v. Aspinwall, 13 N.Y. 500; Furniss v. Ferguson, 34 id. 485; Joslyn v. Cowee, 56 id. 626; U.S. Statutes, § § 5151, 5239; Frazier v. Tompkins, 30 Hun, 168; Goillotel v. Mayor, 87 N.Y. 441.) The ruling that the eight stockholders named on the records as additional plaintiffs, January 27, 1883, were barred, though the liability be under the six years' statute, is erroneous. (Code, § 448; Dennis v. Kennedy, 19 Barb. 527; Story's Eq. Pl. 99 to 116, 125-135; Brooks v. Peck, 38 Barb. 519; Kerr v. Blodgett, 48 N.Y. 62; Kittle v. Crary, 1 Paige, 417; Graves v. Gouge, 69 N.Y. 154.) The corporation should have prosecuted. Because of its omission to do so, this action stands as a substitute, and has the same force and effect as one by the corporation. ( Hallett v. Hallett, 2 Paige, 19; 1 Barb. Ch. Pr. 519; Code, § 786.) The only statute applicable to the cause of action is section 97, old Code, enacted into the present Code as section 388, allowing ten years after the cause of action accrues. ( Rundle v. Allison, 34 N.Y. 180; Salisbury v. Mores, 7 Lans. 359; Scott v. Stebbins, 91 N.Y. 605.)

Samuel Hand for respondents. The eight additional plaintiffs whose actions were commenced on the 5th of February, 1883, by virtue of the order of the 27th of January, 1883, are beyond the six years' statute of limitations, if that was applicable, and if beyond the six years they are certainly beyond the three years statute. (...

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