Egbert v. Abrams

• Decision Date: 03 October 1935
• Citation: 181 A. 522
• Parties: EGBERT v. ABRAMS et al.
• Court: New Jersey Supreme Court

181 A. 522

EGBERT

v. ABRAMS et al.

Supreme Court of New Jersey.

Oct. 3, 1935.

Action by George W. Egbert, successor to George A. Broderick, superintendent of banks, state of New York, against Benjamin Abrams and others. On motion to strike answers of certain defendants and demands for bills of particulars of certain other defendants.

Answers and demands for bills of particulars stricken.

McDermott, Enright & Carpenter and Carl S. Kuebler, all of Jersey City, for plaintiff.

David Smith, of Paterson, for defendant Samuel Raff.

Weinberger & Weinberger and Joseph J. Weinberger, all of Passaic, for defendants Bernard J. O'Brien, James A. O'Brien, Joseph J. Weinberger, and Sarah W. Weinberger.

Thomas S. Doughty, of Newark, for defendants John U. Kirk and Alcibiades C. Psiaki.

Marder & Okin and Aaron Marder, all of Newark, for defendants Joseph Okin and Hugo Aderer.

Harold Farkas, of Newark, for defendant Elsie Lissner.

PORTER, Supreme Court Commissioner.

The motion in the above matter is to strike answers of certain defendants and demands for bills of particulars of certain other defendants. The suit is brought by the superintendent of banks of the state of New York against some 557 New Jersey stockholders of the Bank of the United States, a New York corporation, to recover assessments made against them by the said plaintiff made by him in pursuance with the authority vested in him under the statute of New York.

The Supreme Court of this state granted a motion to strike the complaint in pursuance with the provisions of section 94b of the corporation act (2 Comp St. 1910, p. 1656, § 94b), holding that the above act was a bar to an action at law in this state against the stockholders of a New York corporation. Broderick v. Abrams, 112 N. J. Law, 309, 170 A. 214. This decision was affirmed by the Court of Errors and Appeals on the opinion of Mr. Justice Parker below. 113 N. J. Law, 305, 174 A. 507.

The matter was taken to the Supreme Court of the United States where it was held, Broderick v. Rosner, 294 U. S. 629, 55 S. Ct. 589, 593, 79 L. Ed. 1100, in an opinion by Mr. Justice Brandeis, that the provision of the corporation act of this state above stated was invalid because it violated the full faith and credit clause of the Federal Constitution (art. 4, § 1).

The answers under consideration set up various defenses under the corporation act which have been disposed of by Broderick v. Rosner, supra. The remaining defenses relied upon are generally attacking the action of the banking superintendent in making the assessment, denying his having any power or jurisdiction over these defendants not resident in New York and not being parties to the proceedings in that state. Affirmative defenses are that there was no occasion for the assessments because the bank was in fact solvent.

Section 80 of the New York Banking Law (Consol. Laws, c 2, Laws 1914, c. 369) provides that after the superintendent "has determined from his examination of its affairs that the reasonable value of the assets of such corporation is not sufficient to pay its creditors in full, he may enforce the individual liability of such stockholders." Further provisions provide that, after he has so determined, he shall file a certificate making an assessment and making a demand on the stockholders, and further provides that, in the event of such stockholders failing to pay the assessments, "the superintendent shall have a cause of action, in his own name as superintendent of banks, against such stockholder either severally or jointly with other stockholders of such corporation, for the amount of such unpaid assessment or assessments, together with interest thereon from the date when such assessment was, by the terms of said notice, due and payable."

In Broderick v. Adamson, 148 Misc. 353, 265 N. Y. S. 804, 822, an action was brought by the superintendent of banks against the stockholders of the Bank of the United States, resident in New York, in which case the solvency of the bank was inquired into. Evidence of the value of the assets was offered on behalf of the defendants for the purpose of. contradicting the...