Bank of Toronto v. Manufacturers' & Merchants' Fire Ass'n

42 A. 761, 63 N.J.L. 5, 1899 N.J. Sup. Ct. LEXIS 114

• Court: Supreme Court of New Jersey
• Decided: February 27, 1899
• Status: Published

Opinion

The opinion of the court was delivered by

Dixon, J.

This declaration does not disclose a right of action against McMurran. He is not a party to the contract set forth, nor are any circumstances alleged out of which a personal liability on his part arises. If it were averred that he held in trust a fund delivered to him by the underwriters for the payment of such claims as that of the plaintiff, no doubt he would be suable in equity for the enforcement of the trust, and perhaps he might be suable at law for so much money had aud received to the plaintiff’s use. But no such averment is properly made, and if it were it could only show a liability entirely distinct from that of the other defendant. His liability to the present action is rested solely on his being the attorney of the underwriters and the implication in the policy that as such attorney he may be sued on the contract of his principals.

But we think it is not within the power of parties thus to change the rules of legal procedure. The law indicates who may be sued on the contracts of private persons, and in that law no provision exists for suing an attorney on the obligation of his principal. On this theory rest the decisions in Hybart v. Parker, 4 C. B. (N. S.) 209; Gray v. Pearson, L. R., 5 C. P. 568; Evans v. Hooper, 1 Q. B. D. 45; Knorr v. Bates, 35 N. Y. Supp. (C. P.) 1060; Farjeon v. Fogg, 37 N. Y. Supp. (S. C.) 980; Ralli v. White, 47 Id. 197.

A right of action against the Manufacturers’ and Merchants’ Fire Association of New Jersey is shown. The declaration avers that that body is an unincorporated association of more than two persons united together for business purposes and having a recognized name, and that it issued the policy on which the suit is brought. The supplement to our Practice act approved May 23d, 1890 (Gen. Stat., p. 2592), enacts that such an association may be sued by its recognized name “ in any action affecting the common property or the joint rights and liabilities of such association,” and “ that, when judgment shall be obtained against the defendant in such suit, execution may issue thereon in the same manner as executions now issue on judgments against corporations; and the sheriff or other officer may, by virtue of such execution, levy upon and expose to sale all the common property of such association not by law exempt from sale under execution, whether the same be held in the name of such association or by the directors, stockholders or trustees thereof in trust for such association.”

These provisions are remedial, and therefore should receive a liberal construction. The expression “in any action affecting the common property” should be construed to mean “in any action legally capable of affecting the common property,” whether through execution, as provided in the statute, or by establishing a debt which ought in equity to be paid out of the common property.

On the face of the declaration it appears that this association is organized and doing business under the statutes of this state (Gen. Stat., p. 1784; Pamph. L. 1896, p. 156; Id. 1897, p. 152), and according to those laws it should have on hand, in cash or securities, a fund of not less than $40,000 for the protection of policy-holders. This fund, if it exists, is the common property of the association and may be in such form as to be salable under execution on judgment in the present suit, and if not will certainly be obtainable through proceedings in equity to enforce the judgment. These considerations suffice to render this action one “ affecting the common property” within the intent of the statute. Although the declaration does not distinctly aver that there is such a fund, yet, as the association is required by law to have such a fund, and the legitimate object of the suit is to reach it if it exists, its non-existence ought not to be presumed in order to defeat the suit, although the object of the suit may finally be thwarted, a result possible in most litigation.

The case presented, therefore, is one of misjoinder of defendants in an action on contract.

Assuming that on demurrer such a declaration would be fatally defective at common law, section 38 of our Practice act (Gen. Stat., p. 2539) provides that the misjoinder shall not be objected to on the trial of the cause unless the defendant, within five days after filing his plea or demurrer, give written notice to the plaintiff of such intended objection. Such notice w.as not given, and we must consider what judgment should now, in the absence of notice, be rendered.

The argument of the demurrer must be deemed a trial of the cause, otherwise the statute cannot operate, as it evidently was intended to-do, when a demurrer is filed.

According to the words of the act, the misjoinder cannot now be objected to. In Patterson v. Loughridge, 13 Vroom 21, this court held the meaning of the statute to be that the common law advantage resulting to the defendant should not be taken,' but that the plaintiff should be permitted to maintain his action against any of the defendants whose liability was shown. At common law the effect of misjoinder apparent on the face of the declaration would be to entitle all the defendants to judgment on demurrer. Under our statute the effect is that the plaintiff is entitled to judgment against the defendant who appears to be chargeable, but not against the defendant who appears to be not chargeable.

Let judgment be entered for the plaintiff against the asso- * ciation and for McMurran against the plaintiff.