Sigua Iron Co. v. Brown

CourtNew York Court of Appeals
Writing for the CourtMARTIN
Citation171 N.Y. 488,64 N.E. 194
PartiesSIGUA IRON CO. v. BROWN.
Decision Date10 June 1902

171 N.Y. 488
64 N.E. 194

SIGUA IRON CO.
v.
BROWN.

Court of Appeals of New York.

June 10, 1902.


Appeal from supreme court, appellate division, First department.

Action by the Sigua Iron Company against Harold P. Brown. From a judgment of the appellate division (69 N. Y. Supp. 295) affirming a judgment for plaintiff, defendant appeals. Affirmed.

[64 N.E. 195]


[171 N.Y. 490]William F. Goldbeck, for appellant.

171 N.Y. 491]R. Burnham Moffat, for respondent.
MARTIN, J.

This action was brought by a foreign corporation to recover unpaid calls upon 60 shares of its assessable capital stock transferred to the defendant, and represented by its certificate No. 106. The original complaint was twice [171 N.Y. 492]amended, but the issues tried arose upon the last amended complaint and answer. At the time of the transfer of the stock in question 70 per cent. of its par value had been paid, leaving 30 per cent. subject to future calls. A call for 5 per cent. appears by the record to have been issued by the corporation and paid by the defendant before the actual transfer upon the books of the company and the certificate to the defendant were made. Subsequently the defendant paid three calls,-one for 5 per cent., due November 1, 1890; one for 2 1/2 per cent., due January 15, 1891; and another for 2 1/2 per cent., due February 1, 1891. The calls thus paid amounted to $600, leaving $1,200 unpaid, for which calls were afterwards duly made by the corporation. The defendant was not an original subscriber to the stock of the plaintiff, but the shares represented by certificate No. 106 were transferred to him by one Smith, as trustee, who was obviously the original subscriber. The unpaid calls upon the defendant's stock and the interest thereon from the time they became due amounted to $1,878.10. On the trial, and at the close of the plaintiff's evidence, the defendant moved to dismiss the complaint upon the grounds: (1) That it did not state, and the plaintiff had not proved, facts sufficient to constitute a cause of action; (2) that the action was commenced at a time when the corporation had no right to bring such an action, being restrained by the Pennsylvania receivership; (3) that the receiver had no right to commence the action, not having been appointed receiver in this state; and (4) ‘that, as the amended complaint was interposed by an utter stranger to the action, the action has been practically abandoned by the corporation plaintiff, and is now being conducted by a stranger to the action.’ This motion was denied, and an exception was taken. The defendant's counsel then offered in evidence the original and supplemental complaints in this action, the order substituting Logan M. Bullitt as plaintiff, and the order vacating that order. After the introduction of this evidence, and after certain admissions [171 N.Y. 493]by the plaintiff were made, the defendant rested, and the evidence was closed. The defendant thereupon moved to dismiss the complaint upon the ground that the order appointing the ancillary receiver made him receiver of the assets of the plaintiff in this state, confining him to the collection of those assets, and upon the ground that the defendant, at the time of the commencement of this action and ever since, has been a nonresident of the state. This motion was also denied, and the defendant excepted. The record then states: ‘Plaintiff and defendant move for the direction of a verdict. The court directs a verdict for the plaintiff for $1,878.10. Defendant moves for a new trial on the minutes. The court entertains the motion, and directs that entry of judgment be suspended until the determination of that motion.’ The motion for a new trial was subsequently denied, and judgment entered upon the verdict. From the order denying the motion for a new trial and from the judgment an appeal was taken to the appellate division, where both were affirmed, and the defendant has appealed to this court.

The court directed a verdict in favor of the plaintiff for the amount of the calls and interest thereon, to which the defendant took no exception. Nor did he request the submission of any question to the jury. The request by both parties for the direction of a verdict amounted to a submission of the whole case to the trial judge, and his decision upon the facts has the same effect as if the jury had found a verdict in the plaintiff's favor after the case was submitted to it. Adams v. Lumber Co., 159 N. Y. 176, 53 N. E. 805;Smith v. Weston, 159 N. Y. 194, 54 N. E. 38;Thompson v. Simpson, 128 N. Y. 270, 283,28 N. E. 627;Koehler v. Adler, 78 N. Y. 287;Sweetland v. Buell, 164 N. Y. 541, 548,58 N. E. 663,79 Am. St. Rep. 676.

The first ground upon which the defendant relies to sustain this appeal is that the plaintiff had no right or legal capacity to bring

[64 N.E. 196

this action, its title and right of action having passed to a federal receiver before it was commenced. The defendant introduced in evidence a decree of the circuit court of the United States for the Eastern district of Pennsylvania made in October, 1893, appointing Logan M. Bullitt a receiver [171 N.Y. 494]of the plaintiff. This decree was granted with the consent of the plaintiff and upon the application of certain persons named as plaintiffs in that action. It was based upon a bill of complaint and affidavits, and was evidently an appointment of a temporary receiver pendente lite. Subsequently, and after the commencement of this action, the same person was appointed ancillary receiver in this state. It is obvious from an examination of the decree of the federal court that the receivership consented to by the parties was a temporary one, and not a permanent receivership after trial and dissolution of the corporation. If he was a permanent receiver, it was not established by the proof. The appointment of a temporary receiver pendente lite does not dissolve a corporation, nor restrain the exercise of its corporate powers. His functions are limited to the care and preservation of the property committed to his charge. He does not represent the corporation in its individual or personal character, nor supersede it in the exercise of its corporate powers, except as to the particular property confided to him. This receiver was appointed by the United States circuit court for the Eastern district of Pennsylvania, and, consequently, his powers were limited to the district in which the decree was made, unless some additional power was subsequently conferred. The corporation still had the right to exercise its corporate powers, except as to the matters and claims specially confided to the receiver by that court. The title to the property was not changed by his appointment. The receiver acquired no title, but only the right of possession as the officer of the court. The title remained in the corporation, in which it was vested when the appointment was made. Keeney v. Insurance Co., 71 N. Y. 396, 401,27 Am. Rep. 60;Herring v. Railroad Co., 105 N. Y. 340, 372,12 N. E. 763;Decker v. Gardner, 124 N. Y. 334, 338,26 N. E. 814,11 L. R. A. 480;Stokes v. Hoffman House, 167 N. Y. 554, 559,60 N. E. 667,53 L. R. A. 870;Kincaid v. Dwinelle, 59 N. Y. 548;Glass Co. v. Vary, 152 N. Y. 121, 125,46 N. E. 312;Pringle v. Woolworth, 90 N. Y. 502, 503. Therefore it follows that the right to recover the calls unpaid by the defendant remained in the corporation, and it had a [171 N.Y. 495]right of action to enforce them against the defendant, who was personally served with process in this state, and who was not a resident of the state of Pennsylvania, nor, so far as the proof discloses, subject to its jurisdiction.

But it is contended that upon the appointment of the ancillary receiver in this state, which was after the commencement of this action, there was no authority for its continuance in the name of the plaintiff. Sections 755 and 756 of the Code of Civil Procedure provide: ‘An action does not abate by any event, if the cause of action survives or continues. * * * In case of a transfer of interest, or devolution of liability, the action may be continued, by or against the original party; unless the court directs the person, to whom the interest is transferred, or upon whom the liability is devolved, to be substituted in the action, or joined with the original party, as the case requires.’ Obviously these provisions of the Code justified the continuation of the action, even after the appointment of an ancillary receiver, and authorized him to continue it in the name of the plaintiff; and, as he verified the amended complaint as receiver, he manifestly accepted the action as it then stood, and became responsible for its prosecution. Warehousing Co. v. Badger, 67 N. Y. 294, 299, is decisive of this question. There an action was commenced in the name of a corporation before the appointment of a temporary receiver, and this court held that it could be continued in the name of the original party for the benefit of the receiver under the provisions of the Code.

The next error assigned by the defendant is that the court erred in admitting in evidence the plaintiff's books without proper authentication, and that they were not evidence against him. There is no claim that the books were not the original books of the corporation, nor that they were not proved to be such, and to have been in the custody of its proper officer. But the claim is that each entry should have been proved to be correct by the person actually making it, and unless that was done they were inadmissible. Doubtless there are cases where it would be necessary to show the correctness of the entries [171 N.Y. 496]in the books of a corporation before they could be received in evidence. But those cases are where they have been offered or admitted to prove an account of a corporation for the purpose of establishing a debt or liability against third persons in an action brought by or in behalf of the corporation. That they are not...

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24 practice notes
  • Evans v. Cheyenne Cement, Stone & Brick Company, 673
    • United States
    • United States State Supreme Court of Wyoming
    • March 24, 1913
    ...Stockstill v. R. Co., 24 O. St. 83; N. P. R. Co. v. Mares, 123 U.S. 713; Hopkins v. Clark, 158 N.Y. 304, 53 N.E. 27; Iron Co. v. Brown, 171 N.Y. 488, 64 N.E. 194; Lynch v. Johnson, 109 Mich. 640, 67 N.W. 908; Chicago &c. R. Co. v. Wedel, 144 Ill. 9, 32 N.E. 547; Chamberlain v. Woodin, (Ida.......
  • St. Louis Southwestern Railway Co. v. Mulkey
    • United States
    • Supreme Court of Arkansas
    • July 10, 1911
    ...130; 70 F. 778; 35 App. 774; 90 N.Y. 649; 97 N.Y. 586; 7 N.Y.S. 69; 7 N.Y. 645; 14 N.Y.S. 917; 87 Hun 563; 34 N.Y. 557; 16 N.Y.S. 202; 64 N.E. 194; 171 N.Y. 488; 77 N.W. 615; 8 N.D. 162; 58 C. C. A. 58; 68 Id. 58; 52 N.E. 1124; 158 N.Y. 680; 54 N.E. 805; 97 N.W. 860; 12 N.D. 497; 26 O. St. ......
  • Shloss v. Metro. Sur. Co.
    • United States
    • United States State Supreme Court of Iowa
    • November 21, 1910
    ...powers. His functions are related to the care and preservation of the property committed to his charge.” Sigua Iron Co. v. Brown, 171 N. Y. 488, 64 N. E. 194. It would be most unreasonable to hold that policy holders could be compelled to carry the risk of the result of such proceeding duri......
  • Carr v. Marietta Corp., Docket No. 98-7961
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • August 1, 1998
    ...an implied promise to satisfy any unpaid portion of the stock purchase price upon the corporation's demand. See Sigua Iron Co. v. Brown, 171 N.Y. 488, 502-04, 64 N.E. 194, 198-99 (1902) (shareholder responsible for unpaid portion of share price because of "implied promise" inherent in becom......
  • Request a trial to view additional results
24 cases
  • Evans v. Cheyenne Cement, Stone & Brick Company, 673
    • United States
    • United States State Supreme Court of Wyoming
    • March 24, 1913
    ...Stockstill v. R. Co., 24 O. St. 83; N. P. R. Co. v. Mares, 123 U.S. 713; Hopkins v. Clark, 158 N.Y. 304, 53 N.E. 27; Iron Co. v. Brown, 171 N.Y. 488, 64 N.E. 194; Lynch v. Johnson, 109 Mich. 640, 67 N.W. 908; Chicago &c. R. Co. v. Wedel, 144 Ill. 9, 32 N.E. 547; Chamberlain v. Woodin, (Ida.......
  • St. Louis Southwestern Railway Co. v. Mulkey
    • United States
    • Supreme Court of Arkansas
    • July 10, 1911
    ...130; 70 F. 778; 35 App. 774; 90 N.Y. 649; 97 N.Y. 586; 7 N.Y.S. 69; 7 N.Y. 645; 14 N.Y.S. 917; 87 Hun 563; 34 N.Y. 557; 16 N.Y.S. 202; 64 N.E. 194; 171 N.Y. 488; 77 N.W. 615; 8 N.D. 162; 58 C. C. A. 58; 68 Id. 58; 52 N.E. 1124; 158 N.Y. 680; 54 N.E. 805; 97 N.W. 860; 12 N.D. 497; 26 O. St. ......
  • Shloss v. Metro. Sur. Co.
    • United States
    • United States State Supreme Court of Iowa
    • November 21, 1910
    ...powers. His functions are related to the care and preservation of the property committed to his charge.” Sigua Iron Co. v. Brown, 171 N. Y. 488, 64 N. E. 194. It would be most unreasonable to hold that policy holders could be compelled to carry the risk of the result of such proceeding duri......
  • Carr v. Marietta Corp., Docket No. 98-7961
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • August 1, 1998
    ...an implied promise to satisfy any unpaid portion of the stock purchase price upon the corporation's demand. See Sigua Iron Co. v. Brown, 171 N.Y. 488, 502-04, 64 N.E. 194, 198-99 (1902) (shareholder responsible for unpaid portion of share price because of "implied promise" inherent in becom......
  • Request a trial to view additional results

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