King v. Barnes

Decision Date10 April 1888
Citation109 N.Y. 267,16 N.E. 332
PartiesKING et al. v. BARNES et al.
CourtNew York Court of Appeals Court of Appeals

OPINION TEXT STARTS HERE

Appeal from general term, supreme court, Second department.

Action in equity by Thomas M. King, John K. Cowen, John W. Davis, Samuel Spencer, Robert Garrett, Erastus Wiman, John F. Emmons, and Albert B. Boardman, respondents, against Reon Barnes, John H. Post, William C. Carpenter, Wilbur F. Disosway, George G. Guion, and New York Transit & Terminal Company, Limited, appellants. The substance of the original complaint is that in November, 1885, an agreement was entered into between plaintiffs, and defendant Barnes, to the effect that certain property on the north shore of Staten island should be bought for the joint account, and a corporation should be formed, under the act for the organization of business corporations, (Laws 1875, c. 611,) to take title to the property, the capital stock of which corporation should be issued to the respective parties in proportion to their several interests. That Barnes was made the agent of the parties for the purpose of buying the property, and organizing the corporation, with authority to select persons to act temporarily as directors, who were to resign upon request, and give place to the real parties in interest. That the corporation was organized with a capital stock of $100,000, the defendants Post, Carpenter, Disosway, and Guion, together with Barnes, constituting the first board of directors, the four first named subscribing each for five shares of the capital stock, and Barnes subscribing for the remaining 980 shares,-for his own account to the extent of one-ninth, and as to the rest for the account of the plaintiffs. That, shortly afterwards, certain real estate, known as the ‘Barton Property,’ was bought by the associates for $100,000, and conveyed to the corporation, so created and organized, in payment for which it created and issued the whole of its capital stock, being, as above mentioned, $100,000. That in the month of December, 1885, certain other real estate was purchased at a cost of $183,000, and was conveyed to the corporation. That the purchase money was advanced by the plaintiff Thomas M. King, to secure which the corporation executed to him, as trustee, a mortgage for the amount of the advance, the mortgage being made for $250,000, to provide for the contingency of further advances being required to pay for other property that the associates might find it desirable to purchase. That, in the same month, steps were taken to increase the capital stock of the company $900,000, so that the aggregate capital should be $1,000,000. That, in the same month of December, Barnes, without the knowledge or consent of the plaintiffs, his associates, fraudulently, and without consideration, caused the company to issue to himself 7,000 shares of the increased capital stock so authorized. That, in the month of January, 1886, the plaintiffs King, Garrett, Spencer, Cowen, and Davis demanded of Barnes that he should deliver to them, respectively, their due proportion of the original and lawful capital stock of $100,000, which he had subscribed for in his own name on account of the associates offering to pay to him any sums of money that he might have advanced on their behalf. Before that there had been transferred to the nominees of the plaintiffs Boardman, Emmons, and Wiman the shares to which they were respectively entitled, so that this demand embraced only the shares belonging to the remaining five plaintiffs, and these shares, standing in the name of Barnes, he refused to transfer. That Barnes had placed in the custody of the defendant Charles Coudert all the shares of the company standing in his (Barnes') name. The prayer for relief is that a receiver may be appointed of the shares in the defendant Barnes' name; that the defendant Coudert be required to surrender the certificates in his possession to such receiver; that the company, and the other defendants, be restrained from selling, or in any manner disposing of, the property; that an accounting may be had between the defendant Barnes and the plaintiffs; and for such other relief in the premises as may be just and equitable.

John H. Post, for appellants.

Wm. W. McFarland, for respondents.

RUGER, C. J.

The questions involved in this case are difficult and complicated, arising not only from the number and variety of the questions themselves, but also from the peculiar and unusual mode in which they are brought up for review. Two appeals have been taken,-one by all of the defendants directly from a final judgment rendered at special term to this court. This appeal brings up nothing but an interlocutory judgment previously rendered by the general term, and the order of that court denying defendant Barnes' motion for a new trial. The other appeal is taken by the defendant Barnes alone from an affirmance by the general term of the final judgment, and brings before us for review the proceedings had in the action subsequent to the interlocutory judgment. Thus, in one form or another, it is claimed that most of the orders and judgments heretofore made and rendered in the action are now before us for review. The quite objectionable practice has also been pursued of entering orders upon incidental questions decided upon the trial, and appealing from such orders as well as from the judgments, thus bringing the same question up in two forms. The nature of the action, as appears by the complaint concisely stated, was in equity to obtain an accounting between several partners of their respective payments and advances on account of the joint enterprise, and to secure a distribution of the partnership assets, consisting of shares in the defendant corporation, among its members according to their respective rights therein. The answers set up no affirmative defense, and consisted mainly, if not altogether, of denials of the allegations of the complaint. A trial at special term resulted in an interlocutory judgment determining the issues in favor of the plaintiffs, and providing for the taking of an account. On appeal by the defendants from this judgment to the general term, it was modified in some respects, and, as modified, was affirmed. The parties originally named as defendants in the action were Barnes, the New York Transit & Terminal Company, Post, Carpenter, Disosway, and Guion, (president and directors of such company,) and Bonner, Francis, Morrow, and Coudert, alleged to be custodians of the shares of stock in which the assets of the partnership were invested. The defendants Bonner, Francis, Morrow, and Coudert, having no personal or pecuniary interest in the controversy, very properly did not appear or answer in the action. The defendants the New York Transit & Terminal Company, and Post, Carpenter, Disosway, and Guion, however, did appear and answer, and have since participated actively in its defense as the aids and auxiliaries of the defendant Barnes.

It will be convenient to treat the questions in which the defendant corporation and its directors are solely interested before proceeding to consider those with which the defendant Barnes is exclusively concerned. These defendants, although having no pecuniary interest in the event of the action, were proper parties to an equity action under its general rules of practice, as well as by section 447, Code Civil Proc., in order that a complete determination and settlement of the questions involved might be had, and that the plaintiffs might receive the full benefit and enjoyment of the property which the final judgment might award them, relieved from any obstacle which such parties might interpose thereto. 1 Deniell, Ch. Pr. 296 et seq.; Robinson v. Smith, 3 Paige, 221. Their appearance in the action, however, was purely voluntary, and they could safely have refrained therefrom without jeopardizing any right or interest which they owned or possessed, either personally or officially, and without incurring any liability whatever for so doing. They could not, under these circumstances, have become entitled to costs in the action as against the plaintiffs, and the only effect of their appearance was to subject them to costs, in the discretion of the court, if it should finally determine they had unnecessarily defended. The complaint asked for no relief or judgment against these defendants except such as would be conclusively established by a determination of the issues against Barnes, and the relief sought is purely incidental thereto. At the close of the plaintiffs' case on the trial, these defendants moved the trial court to dismiss the complaint as to them, upon the ground that no case, either upon the evidence or pleadings, had been made for an affirmative judgment against them, and that they were unnecessary parties to the action, which motion was granted. That court also declined to allow the plaintiffs to amend their complaint so as to set forth more in detail the facts authorizing a recovery against Barnes, and the necessity of retaining the other parties as defendants in the action; but, upon an appeal from these orders by the plaintiffs to the general term, that court reversed them, and restored the defendants as parties to the action, and amended the complaint as requested by the plaintiffs. Upon an appeal by the defendants the New York Transit & Terminal Company and its directors from this order to this court, it dismissed their appeal, holding that the amendment was within the power of the court, under section 733 of the Code, and did not substantially change the claim of the plaintiffs, and was therefore a discretionary order. Any question, therefore, as to the propriety of this order is eliminated from these appeals. It is now claimed by these defendants that it was error in the general term to reverse the order of the trial court dismissing the complaint as to them, and rendering an absolute judgment thereon, without affording them an...

To continue reading

Request your trial
72 cases
  • Yonofsky v. Wernick
    • United States
    • U.S. District Court — Southern District of New York
    • July 26, 1973
    ...Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545 (1928); Selwyn & Co. v. Waller, 212 N.Y. 507, 106 N.E. 321 (1914); King v. Barnes, 109 N.Y. 267, 285, 16 N.E. 332, 336 (1888); R.C. Gluck & Co. v. Tankel, 12 A.D.2d 339, 211 N.Y.S.2d 602 (1st Dept. 1961), aff'g, 24 Misc.2d 841, 199 N.Y.S.2d 12 ......
  • Denny v. Guyton
    • United States
    • Missouri Supreme Court
    • May 27, 1931
    ... ... 449; 39 Cyc. 182; Goss v ... Lanin, 170 Iowa 57, 152 N.W. 43; Berry v ... Colburn, 65 Va. 493; Boqua v. Marshall, 88 Ark ... 373; King v. Wise, 43 Cal. 628; Hamburg v ... Lotz, 4 Cal.App. 438; Hambleton v. Rhind, 84 ... Md. 456, 40 L. R. A. 216; Calkins v. Worth, 215 Ill ... 403; Marston v. Gould, 69 N.Y ... 220; Bradley v. Wolff, 83 N.Y.S. 13; Spier v ... Hyde, 92 A.D. 467, 87 N.Y.S. 285; King v ... Barnes, 109 N.Y. 267; Schantz v. Oakman, 163 ... N.Y. 156; Merritt v. Joyce, 117 Minn. 235; Kent ... v. Costin, 130 Minn. 450; Brady v. Erlanger, ... ...
  • State ex rel. Harwood v. Sartorius
    • United States
    • Missouri Supreme Court
    • December 16, 1946
    ...535; 14 C.J. 85, sec. 1349; Behlow v. Fischer, 36 P. 509, 102 Cal. 208; Doremus v. Natl. Cotton Imp. Co., 39 App. D.C. 295; King v. Barnes, 16 N.E. 332, 109 N.Y. 267; Perkins v. Banguet Cons. Mining Co., 132 P.2d (2) The only portion of the injunctive provisions in the decree which would no......
  • Botsford v. Van Riper
    • United States
    • Nevada Supreme Court
    • September 2, 1910
    ... ... doctrine of joint adventure. 23 Cyc. p. 454; Alderton v ... Williams, 139 Mich. 296, 102 N.W. 753 (1905); King ... v. Barnes, 109 N.Y. 267, 16 N.E. 332; O'Hara v ... Harman, 14 A.D. 167, 43 N.Y.S. 556; Boqua v ... Marshall, 88 Ark. 373, 114 S.W. 714 ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT