Witherhead v. Allen

3 Keyes 562, 3 Trans. App. 258
CourtNew York Court of Appeals
DecidedJune 15, 1867
StatusPublished
Cited by10 cases

This text of 3 Keyes 562 (Witherhead v. Allen) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Witherhead v. Allen, 3 Keyes 562, 3 Trans. App. 258 (N.Y. 1867).

Opinion

Pabkeb, J.

This action was commenced under the statute of 1849, entitled An act in relation to suits by and against joint-stock companies and associations,” as amended in 1853, against the appellants and seven other persons, alleged to be members of a joint-stock association, after judgment and execution against the company.

The complaint alleges that the defendants were, during the year 1857, members of and shareholders in a joint-stock company or association, duly organized and styled and known as The Ontario & St. Lawrence Steamboat company.” That during that year and while the defendants were members thereof, the company became indebted to the plaintiff for goods sold and delivered to its officers and agents, for its use and benefit in the sum of $162.51. 'That he commenced an action against the company, on the said demand, by the service of a summons and complaint on its president, and on the 26th of December, 1857, obtained a judgment for $165.22 damages and $12.89 costs, making in [563]*563all $178.12. That on the same day an execution upon such judgment was issued and delivered to the sheriff of St. Lawrence county, requiring him, etc. (in the usual form). That ';lie execution has been returned wholly unsatisfied and the judgment remains wholly unpaid. Judgment for $178.12 with interest from December 26, 1857, was demanded.

To the complaint these defendants demurred, on the ground that the complaint does not state facts sufficient to constitute a cause of action.”

The plaintiff applied to a justice of the court at chambers, for judgment against these defendants upon the demurrer for the frivolousness thereof. The motion was granted, and final judgment ordered in the action against these defendants for the sum demanded in the complaint, which was thereupon entered. From this judgment the defendants appealed to the General Term, where it was affirmed, and from the judgment of affirmance they now appeal to this court.

The question brought here by the appeal is upon the issue of law raised by the demurrer: Does the complaint state facts sufficient to constitute a cause of action 1 (Manning v. Tyler, 21 N. Y. 567; id. 502; The East River Bank v. Rogers, 7 Bosw. 493.)

By the first section of the act of 1849, “ any joint-stock company or association, consisting of seven or more shareholders or associates, may sue and be sued in the name of the president or treasurer for the time being of such joint-stock company or association; and all suits and proceedings so prosecuted by or against such joint-stock company or association, and the service of all process or papers in such suits and proceedings on the president or treasurer for the time being of such joint-stock company or association, shall have the same force and effect as regards the joint rights, property and effects of such joint-stock company or association, as if such suits and proceedings were prosecuted in the names of all the shareholders or associates, in the manner now provided by law.” (Sess. Laws 1849, chap. 258, § 1.)

The fourth section of this act as amended in 1853, enacts as follows: “ Suits against any such joint-stock company or [564]*564association in the first instance, shall he prosecuted in the manner provided in the first section of the said act; hut after judgment shall be obtained against any such joint-stock company or association as above provided, and execution thereon shall be returned unsatisfied in whole or in part, suits may be brought against any or all of the shareholders or associates, individually, as now provided by law.” (Sess. laws 1853, chap. 153.)

The joint-stock companies mentioned in these acts, are not corporations, but mere partnership concerns, in which the shareholders are partners, and all individually liable as such. These statutes, however, modify the common law in its application to them: First, in respect to the mode of suing the company, and the effect of judgments against it thus obtained, reaching the joint property of the association only: Second, in suspending the right to sue the partners individually for the liabilities of the company, until redress has been thus sought against the property of the association and has failed: Third, in allowing actions after such failure against any or all of the individual partners, in the language of the act, as mow provided by law,” that is, such actions as might have been brought, if the act in question had not been passed.

It seems to me that we cannot, from these enactments, infer the intent to authorize actions against the individual partners upon the judgments so to be obtained against the association. FTo action can be brought against the individual partners upon any demand against the company, until one has been first brought against the company upon the same demand, is the clear declaration of the ■ statute. The cause ■of action, therefore, on which the individual partners are to be sued, is the same as that on which the association was sued. The judgment against the association is not a judgment against the individuals, either in form or effect. It is a statutory judgment, and the statute declares what its effect shall be, that is, as regards the joint rights, property and effects of the joint-stock company, the same as though it were a judgment obtained in an action brought against [565]*565the company in the ordinary way. As against the individual partners it has no force as a judgment, heyond the effect given it by the statute, and is not a substantive cause of action against them. (Bailey v. Bancker, 3 Hill, 192.)

In bringing an action, then, against the individual partners, the complaint should set forth such facts as are sufficient to show the original cause of action against the association, in addition to those made necessary by the act, showing the attempt and failure to collect the demand by judgment and execution, out of the property of the association.

'In the case at bar, it would seem that the pleader proceeded upon the idea that a recovery was to be had upon the judgment against the association, and his demand of judgment is for the amount of that judgment, damages and costs. The defendants’ counsel claims that the complaint being upon the judgment, the action cannot be sustained.

If the pleader in setting forth his cause of action does in fact show a good cause of action, although not the one intended, his pleading will nevertheless be sustained upon demurrer, for it is to be measured, not by his view of the law, but by the law,itself. We must look, then, into the complaint to ascertain whether it sets forth, by proper allegations, a cause of action, independent of the judgment against the association..

It shows the defendants, members of the association, and, besides the proceedings to judgment against the association, and the return of the execution unsatisfied, alleges that during the time when they were such members thereof, “ The said company became indebted to the plaintiff for goods sold and delivered to its officers and agents for its use and benefit, in the sum of one hundred and sixty-two dollars and fifty-one cents.” This is the whole statement of facts. Do they constitute a cause of action %

I confess I am quite unable to see a cause of action in the statement.

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Bluebook (online)
3 Keyes 562, 3 Trans. App. 258, Counsel Stack Legal Research, https://law.counselstack.com/opinion/witherhead-v-allen-ny-1867.