Horton & Grandison, of Buffalo, for plaintiffs. TAYLOR, J. This action is brought by a judgment creditor of the Dilley & Wall Company, Limited, a domestic corporation, in behalf of itself and others similarly situated, to enforce the personal liability of stockholders of said company to the amount of a portion of the sum unpaid upon stock held by them. The action is authorized by section 56 of our Stock Corporation Law (Consol. Laws, c. 59). The defendant White signed the certificate of incorporation as a subscriber for 63 shares of its capital stock, of the par value of $100 each, and paid thereon $500. He was named as a director of the corporation, and never resigned that office. The said certificate of incorporation was filed according to law. This action is in proper form, for the plaintiff, the defendant White, and the judgment creditors, Henrichs Sons Company and Hubbs & Howe Company, are all entirely within the requirements of the applicable sections of the Stock Corporation Law. "The defendant White gives various reasons why he should not be held. He claims: (1) That he agreed to take only 5 shares, which he paid for; he having subscribed, as he claims, for 63 shares on the theory and understanding that all but 5 of them were to be later transferred to other parties. (2) That since defendant White did not pay 10 per cent. down on the remaining 58 shares purchased he cannot be held liable thereon, because of section 53 of the Stock Corporation Law. (3) That defendant White was not obligated to pay at all until the full amount of the capital stock had been subscribed, and that he never promised to pay for the 58 shares. (4) That stockholders' liability cannot be enforced in this action because the debts covered by the complaint are not valid debts of the corporation, and therefore not enforceable against stockholders, for the reason that all the amount of capital, specified in the certificate of incorporation as the amount with which the corporation would begin business, was not paid in before the debts were incurred. [1] First, as to defendant's claim No. 1. Defendant White signed the certificate of incorporation, which is more than the defendant did in Lyell Co. v. Lighthouse, 137 App. Div. 422, 121 N. Y. Supp. 802. In that case a preliminary subscription paper only was signed. And while defendant White, perhaps, did not hold himself out as a stockholder, as defendant did in the Lyell Case, still I think that in the case at bar, as the court says in the Lyell opinion, although the defendant claims the benefit of an oral condition accompanying his signing of the certificate, "the oral condition was ineffectual to defeat the legal effect of his subscription." Creditors of such an organization would surely be deprived of the protection which I think the Legislature intended to give them when it enacted section 56 of the Stock Corporation Law, if a subscriber to a certificate of incorporation could thus easily escape the consequences following his voluntary act like this, whereby notice was given to all the world through the filing of the certificate that creditors of the new corporation could rely on the responsibility of the defendant White to the amount of $6,800. And this is particularly true when the subscriber was a lawyer, and was at least intimately associated in business with the incorporator of the company, who was himself an attorney at law. As is stated in Stevens v. Episcopal, etc., Co., 140 App. Div. 582, 125 N. Y. Supp. 582: "The certificate, of course, when filed, became binding on the subscribers, and their liability is fixed by their subscriptions without the formal issuance of stock to them." This action was in part an action similar to the one at bar. The reasoning of Hiscock, J., in Flour City National Bank v. Shire, 88 App. Div. 401, 84 N. Y. Supp. 810, while not fully in point, applies to this situation. So, too, does that in the Kohlmetz Case, 16 App. Div. at pages 519, 520, 44 N. Y. Supp. at pages 1031, 1032, viz.: "A person may become the owner of shares of stock of a corporation by subscription or by purchase. In the former case he becomes a member and takes all the rights as such by his subscription to the original stock. And no offer or delivery of a certificate is essential to his liability to pay the amount of the shares for which he has subscribed. *** A certificate, however, is not necessary to make a subscriber to the stock of a corporation a stockholder, whether he becomes such before or after its organization. It is merely evidence of that relation." To be sure, the action in the latter case was by a receiver; but the principle is no different from that involved here. [2] The second, third, and fourth points made by defendant White, above indicated, hardly seem to require discussion. While some of them might be of avail, were other issues involved, like an action by the state, for example, to forfeit the charter of the corporation, it seems to me, as I have said before, that after this defendant, with others, had executed a certificate of incorporation of a business corporation, which certificate is duly filed, and after such business corporation had incurred honest debts, the defendant cannot, as to such creditors, be permitted to say that he should not be held to his compact for any such reasons as those given. Judgment may be entered against the defendant White to the amount of the claims proved by the three above named judgment creditors. MARKETT v. GEMKE et al. (Supreme Court, Special Term, Erie County. July, 1915.) JUDGMENT 648-CONCLUSIVENESS-CRIMINAL PROSECUTION. Where, in proceedings by a landlord to remove a tenant and subtenant on the ground that they were using the premises for disorderly purposes, the landlord introduced in evidence the record of the conviction of the subtenant on her plea of guilty to the charge of using the premises for disorderly purposes, the testimony of the subtenant to prove that she had not violated the ordinances of the city was improperly excluded, though the record was admissible to establish a prima facie case against her. [Ed. Note. For other cases, see Judgment, Cent. Dig. §§ 1309, 1310; Dec. Dig. ~648.] For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes Appeal from City Court of Buffalo. Proceeding by John A. Markett against Hulda A. Gemke and another for the removal of defendants as tenant and subtenant. From a judgment of the City Court awarding petitioner the possession, defendants appeal. Reversed, and new trial ordered. William Kilhoffer, of Buffalo, for appellants. Bartholomew & Bartholomew, of Buffalo, for respondent. BROWN, J. Rose Deigelman, upon being arraigned in the criminal branch of the City Court, entered a plea of guilty to the charge of using the premises in question for disorderly purposes, in violation of chapter 9, section 2, of the ordinances of the city of Buffalo prohibiting such use. Thereupon the petitioner served a notice upon Hulda A. Gemke and Rose Deigelman, electing to terminate the lease that he had theretofore given Hulda A. Gemke, for using the premises for disorderly purposes and suffering the nuisance of a bawdyhouse to be created thereon; the service of such notice being in pursuance of the terms of the lease permitting a cancellation of the same for such reasons. Rose Deigelman is a subtenant of Hulda A. Gemke. Proceedings were thereupon instituted in the City Court for a removal of Rose Deigelman and Hulda A. Gemke; the petition therefor alleging that the tenant, Hulda A. Gemke, and the subtenant, Rose Deigelman, were using the premises for disorderly purposes and suffering a bawdyhouse to be maintained thereon. Answers were filed denying such allegation of the petition. Upon the trial the petitioner introduced the record of the conviction of Rose Deigelman, upon her plea of guilty, of the charge of using the premises for disorderly purposes, and rested his case. Rose Deigelman thereupon took the witness stand, and, after giving some testimony, was asked by her counsel what occurred at the time of her arrest, arraignment, and plea. The question was objected to, and the objection was sustained, on the ground that the court would receive no facts upon which the arrest was based; the court stating that the witness could not go behind the record, and holding that, in view of her admission in open court of guilt, she could not show that she kept a good house, and that the record of her conviction was conclusive, and could not be disputed. To these rulings exceptions were taken, and it is now urged that the rulings were erroneous, and that for that reason judgment should be reversed. In 7 Encyclopedia of Evidence, page 851, it is said: "If judgment be rendered in a criminal prosecution on a plea of guilty, such judgment is not conclusive evidence of the truth of the criminal matter charged, when used in a civil case, and the defendant may show upon the trial of the civil action for damages that he was not in fact guilty of any offense"-citing Crawford v. Bergen, 91 Iowa, 675, 60 N. W. 205; Clark v. Irwin, 9 Ohio, 131; Schreiner v. High, etc., 35 Ill. App. 576. In Sims v. Sims, 75 N. Y. 466, the trial court held that the record of a criminal conviction of a witness for a felony was conclusive, so as to preclude the witness from testifying that he was not guilty. Upon review it was held to be error; Judge Rapallo, after discussing the effect of the record of conviction, saying: "A record of conviction for a crime is not" conclusive evidence "in a civil action to prove the fact upon which it is based. ** It has been held that such judgments may, under some circumstances, be received in civil actions as prima facie evidence of the fact of guilt, but never as conclusive, or as estopping the party convicted from proving his innocence. When offered for the purpose of establishing the fact of guilt there is great weight of authority for the proposition that it is not admissible in a civil case, but it is well settled that if admitted it is only prima facie evidence. * * The authorities clearly show that, if a fact is proved in a civil case by a record of conviction in a criminal prosecution, that proof is not conclusive, but can be rebutted"-citing Maybee v. Avery, 18 Johns. 352, wherein the conviction for a crime was had on a plea of guilty. In Gardner v. Bartholomew, 40 Barb. 325, the witness was allowed by the trial court to explain the circumstances under which she was convicted of larceny upon her plea of guilty; for this error the judgment was reversed. In discussing the case in Sims v. Sims, supra, Judge Rapallo says: "It is apparent that the distinction between records of criminal convictions and judgments in civil actions between the parties was overlooked, as the authorities cited refer to judgments in civil proceedings, and the distinction is not alluded to." The judgment of conviction was not rendered in an action between the parties to this proceeding. It was properly received in evidence as against Rose Deigelman, and was a prima facie case against her. It was not conclusive. It was error to exclude such evidence as Rose Deigelman offered to prove that she had not violated the provisions of the ordinances of the city. Judgment reversed, and new trial ordered in the City Court; trial to be had August 2, 1915, at 10 o'clock a. m. In re GATES. (No. 161-70.) (Supreme Court, Appellate Division, Third Department. July 1, 1915.) 1. WITNESSES 208-PHYSICIANS-PRIVILEGE OF PATIENT. Under Code Civ. Proc. § 834, providing that a physician shall not be allowed to disclose any information acquired tending a patient, upon an inquisition of lunacy the admission of testimony of defendant's personal physician, whom a third person had engaged to examine defendant to testify against him, was erroneous. [Ed. Note. Dec. Dig. 2. EVIDENCE For other cases, see Witnesses, Cent. Dig. §§ 768-770, 777; 208.] 550-OPINION-NECESSITY FOR HYPOTHETICAL QUESTION. Where, on an inquisition of lunacy, a physician was giving opinion evidence as to the competency of the defendant, it was error to permit an answer basing such opinion in part on the witness' understanding of the evidence given by the petitioner's witnesses in court, but the proper mode for the witness to state his opinion, based on such facts, would have been to have answered a hypothetical question in which they were incorporated. [Ed. Note. For other cases, see Evidence, Cent. Dig. §§ 2366, 2367; Dec. Dig. 550.] For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes Appeal from Special Term, Columbia County. Nelson S. Gates, an alleged incompetent, appeals from an order affirming the findings of an inquisition de lunatico inquirendo, and other orders. Reversed, and new hearing granted. Argued before SMITH, P. J., and KELLOGG, LYON, HOWARD, and WOODWARD, JJ. Ransom H. Gillet, of Albany, for appellant. Ralph M. Cooper, of East Nassau (L. Royce Tilden, of Hudson, of counsel), for respondent. PER CURIAM. [1] It was error to permit the defendant's personal physician to testify as to the competency of his patient. Clearly it was indelicate for a physician in attendance upon a patient to permit himself to be hired by another and go and make an examination of the patient for the purpose of testifying against him. In our judgment it was not only indelicate, but in violation of the privilege given to the patient under section 834, Code Civ. Proc. [2] It was also error to permit a physician, in forming his opinion as to the competency of the appellant, to base it in part upon his understanding and recollection of the evidence given by the petitioner's witnesses in court. If the petitioner wished to avail himself of anything brought out by the examination, the alleged fact should have been incorporated in a hypothetical question. The doctor, by the question put to him, was called upon to form a conclusion as to what the evidence had established. If the case was free from doubt upon the facts, it would not be necessary to reverse the inquisition for these errors; but under all the circumstances we feel that justice will be promoted by a new hearing where the facts may be more fully shown. We conclude, therefore, that the inquisition and order are not fairly sustained by the evidence, and in the interest of justice they are set aside, and a new hearing granted, without costs. Order appealed from reversed, and inquisition set aside. SMITH V. MOULD (No. 323-184.) (Supreme Court, Appellate Division, Fourth Department. July 7, 1915.) 1. MORTGAGES 495-FORECLOSURE-MODIFICATION OF DECREE-CONFORMITY TO OPINION. In an action to foreclose mortgages, in which the opinion properly directed a tender to be paid to the plaintiff, to be applied upon the amount due upon a second mortgage, but where the decision inadvertently directed its application upon the first mortgage, and the judgment followed the decision, the judgment should be modified accordingly. [Ed. Note. For other cases, see Mortgages, Cent. Dig. §§ 1446-1456; Dec. Dig. 495.] 2. MORTGAGES 495-JUDGMENT OF FORECLOSURE-MODIFICATION. A judgment for the foreclosure of three mortgages, only the second and third of which were executed by defendant, making the defendant liable for any deficiency between the amount due on all of the mortgages and the proceeds of the sale, should be modified, so that in no case should For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes |