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is provided by subdivision 4 of section 2863 of the Code of Civil Procedure that "where in a matter of account the sum total of the accounts of both parties, proved to the satisfaction of the justice, exceeds $400.00, the justice cannot take cognizance of the action." He is not ousted of jurisdiction because the amount claimed in the pleadings may exceed that amount. If that were the case, the defendant in every case could oust the justice of jurisdiction by setting up in his answer a claim for more than $400, no matter how ficti. tious the claim might be. The Code requires, before he shall dismiss the action, that he shall be satisfied by evidence. Parker v. Eaton, 25 Barb. 122; Glackin v. Zeller, 52 Barb. 147; Bailey v. Stone, 41 How. Pr. 349. In the absence of any proof in the case, the defendant's counsel succeeded in inducing the justice to dismiss the action solely upon what he claimed appeared upon the face of the pleadings, and, as we have seen, the pleadings failed to show that the amount involved was beyond the jurisdiction of the justice.
The defendant's counsel contends that, the justice having rendered a judgment of discontinuance, it is conclusive upon the question of the amount involved until it is reversed, and that the only manner provided by the Code for reviewing it is by appeal upon questions of law only. Whether he is right in this contention depends upon the construction which shall be given to provisions of the Code. Section 2950 provides that “where upon the trial of an action the sum total of accounts of both parties proved to the satisfaction of the justice exceeds $400.00, judgment of discontinuance must be rendered against the plaintiff with costs." Section 3068 provides: “Where an issue of fact or an issue of law was joined before the justice and the sum for which judgment was demanded by either party in his pleading exceeds $50.00,
the appellant may in his notice of appeal demand a new trial in the appellate court, and thereupon he is entitled thereto." Here, as we have seen, each party did demand judgment for a sum exceeding $50; so that the case falls within the letter of this section. If a new trial is not demanded in the notice of appeal, then the case is reviewed upon questions of law only; but, if a new trial be demanded, then all questions of law and fact are before the appellate court for consideration; and we see no good reason for any embarrassment to arise upon a new trial in the county court in this case, as it will be quite apparent when the trial comes on, from an inspection of the pleadings, that the justice in fact had jurisdiction of the action. Had the justice proceeded with the trial, and decided, upon conflicting evidence, that the amount involved did not exceed the limit of his jurisdiction, the defendant unquestionably would have had the right to appeal to the county court, and there try the question over again. If, as contended by defendant's counsel, the justice's judgment can only be reviewed upon an appeal upon questions of law, it follows that there must be, in this case, four hearings before the litigation is ended,—two in justice's court, and two in the county court. There does not seem to be any occasion for pursuing such a course. The question here presented should not be confounded with a civil action in a justice's court to recover
damages for an assault and battery, libel or slander, for in that class of actions the justice has no jurisdiction of the subjectmatter. Here he had jurisdiction until it is proven upon the trial that the accounts in dispute exceed the limit mentioned. It does not, therefore, follow, because a new trial can be had in the appellate court in this case, that a new trial could be had in the other class of actions. In the one case the question of jurisdiction depends, as we have seen, upon the evidence. Not so in the other cases. We are not referred to any case where the precise question here presented has been adjudicated. In Crannell v. Comstock, 12 Hun, 293, the action was commenced in justice's court, the plaintiff's complaint was for work and materials, and the amount claimed by him was $115.50. The defendant pleaded a set-off for goods sold and delivered to the plaintiff, to the value of $3,000, for which sum he claimed judgment. Both parties introduced evidence before the justice in support of their respective claims. The defendant recovered a verdict for $43.65. An appeal was taken to the county court for a new trial, and the respondent's counsel, in that court, raised the question as to the jurisdiction of the justice because the total of the accounts exceeded $400. It was held, on an appeal to this court, that the county court had nothing to do with the question whether the justice erred in holding that he had jurisdiction; that, the appeal not being upon questions of law, it did not bring up the testimony taken before the justice; and that the county court had no means of determining whether the accounts proved before the justice exceeded $400; and, further, that the appeal brought up the issues of fact joined in the court below, to be tried anew in the county court, and that the jurisdiction of that court, for all purposes of the trial and judgment, was the same as if the action had been commenced in that court originally. The respondent's counsel claims that this is not an authority against him, for the reason that the question of jurisdiction was not raised in that case in the justice's court, and for that reason cannot be considered in the appellate court. There is nothing in this contention, for, if the justice did not have jurisdiction, the consent of the parties would not have given it to him. Oakley v. Aspinwall, 3 N. Y. 552; Plank-Road Co. v. Parker, 22 Barb. 323. The case of Kirk v. Blashfield, 6 Thomp. & C. 509, is not an authority to the contrary. There the justice dismissed the action upon the same ground as in the case at bar, but no appeal was taken from his judgment. The plaintiff commenced a new action in the supreme court, and, recovering less than $50, he demanded and was allowed full costs; the court holding that the justice's judgment, not having been reversed, was conclusive upon the question of the jurisdiction of the parties. We think the county court was in error in granting the order appealed from. It should be reversed, with $10 costs and disbursements of the appeal. All concur.
(75 Hun, 405.)
ARMSTRONG V. DANAHY. (Supreme Court, General Term, Fifth Department. January 18, 1894.) 1. CORPORATIONS_SUBSCRIPTION TO STOCK-SECRET AGREEMENTS.
A secret agreement with some of the subscribers to corporate stock, whereby they are to be released from paying for the stock, is no defense in an action on a subscription made by a person who was not promised
the same advantage. 2. SAME-ACTION ON SUBSCRIPTION-DEMAND.
An order of court that the receiver of a corporation should proceed to collect the outstanding assets of the company dispenses with the necessity of a demand before the receiver can sue on an unpaid stock subscrip
tion. 3. PLEADING-NEGATIVE PREGNANT-WAIVER OF OBJECTIONS.
Where denial is in the identical language of the complaint, and plaintiff goes to trial without moving that the answer be made more definite and certain, he thereby puts the allegations of the complaint in issue, and it is error to exclude evidence offered by defendant, for failure of the answer to make an issue. Action by Charles B. Armstrong, as receiver of the Buffalo Railway Supply Company, against James Danahy. Defendant moves for a new trial on excepticns ordered to be heard in the first instance at general term, after a verdict directed in favor of plaintiff at cir. cuit. Denied.
Argued before DWIGHT, P.J., and LEWIS, HAIGHT, and BRADLEY, JJ.
Henry W. Brush, for plaintiff.
LEWIS, J. This action was brought by the plaintiff, as receiver of the Buffalo Railway Supply Company, to recover of the defendant $500, his subscription to the capital stock of the company. The company was organized on the 30th day of September, 1890, as a domestic corporation, under the laws of the state of New York. By an order of this court dated the 14th day of November, 1892, the corporation was dissolved, and the plaintiff was duly appointed receiver, and by an order of the court dated the 18th day of November, 1892, he was directed, as such receiver, to enforce the collection of all the outstanding assets of the company; and he thereupon brought this action, and alleged in his complaint that the defendant subscribed for $500 of the capital stock of the company, which he had failed to pay. Evidence was given tending to show that the defendant subscribed for stock, as alleged in the complaint, and that many others were subscribers to the stock of the company. The defendant offered to show, as a defense, that one of the cther subscribers to the stock was induced to make his subscription under an arrangement that paid-up stock to the amount of his subscription should be de. livered to him without his paying therefor, and that he (defendant) was induced to make his subscription for stock, relying upon the genuineness of such subscription and others. The evidence was excluded. The evidence was too indefinite to avail the defendant. If such an agreement were in fact made, it did not release the subscriber, or affect his liability upon his subscription. "A secret agreement of the corporation with certain subscribers to stock, whereby they are to be released from payment, or to have some other advantage not common to all the subscribers, is no defense for a subscriber who was not promised the same advantages. All such secret agreements are void, and the subscribers receiving them are liable on their subscriptions absolutely, as though no special advantages had been promised.” Cook, Stock, Stockh. & Corp. Law, § 191, and authorities referred to in the marginal note. Thomp. Liab. Stockh. § 124.
Defendant contends that no call was made upon him for his subscription before the action was commenced. The order of the court that the receiver should proceed to collect the outstanding assets of the company is an answer to this contention.
The defendant was called as a witness, and testified that the subscription book was brought to him for his signature in the spring of 1890, and then the following questions were asked, and rulings made:
"Q. Was it (the subscription book) any different from what it is now when you signed it? (Objected to by plaintiff's counsel. Objection sustained, and exception taken.) Q. Was this line,-this interlineation, 'one hundred thousand dollars, which is to be increased to,'-was that in there when you signed it? (Objected to by plaintiff's counsel. Objection sustained, and exception taken.)"
The defendant claims that the court erred in excluding this evidence. It does not appear upon what ground it was excluded,whether because it was not admissible because the answer failed to raise any issue, or for the reason that the alleged alteration was not material. It was alleged in the complaint that:
"In or about the month of October, 1890, this defendant subscribed for five shares of the capital stock of the said corporation at the par value of one hundred dollars each, and agreed to pay therefor the sum of five hundred dollars in the manner, and at the time, or times, the same might be called for by the board of directors of said company."
The defendant, in his answer, denied that he, "in or about the month of October, 1890," etc., following on in the identical language of the allegation of the complaint. This was the only manner in which the allegations in the complaint referred to were put in issue. The answer might be true, and every material allegation in the complaint at the same time be true. Pomeroy, speaking of such a pleading in his work on Remedies and Remedial Rights, (sec. 623,) says:
"To say the least, a denial in the form of a negative pregnant is such a glaring violation of logical and legal principles that it exhibits, on the part of the pleader, either the ignorance which does not comprehend the nature of an issue, or the astute cunning which is able to conceal the want of a defense under the appearance of a direct answer. In either instance it should be condemned by the court."
There are authorities in our state sustaining this doctrine of Pomeroy. But it was held in Wall v. Waterworks Co., 18 N. Y. 119, that, if the plaintiff go to trial with such an answer without availing himself of the remedy of a motion that it be made more definite and certain, it must be held to put the allegations of the complaint in issue. The doctrine of this case does not appear to have been overruled. This evidence was not, therefore, properly excluded because the answer failed to make an issue. We are, however, of the opinion that the defendant's evidence, and offers of evidence, did not go far enough to show that the alleged alterations in the subscription were material.
It appears on examination of the subscription paper printed in the record that the words, "one hundred thousand dollars, which is to be increased to,” were interlined. As first drawn it read:
"We, the undersigned, do hereby subscribe for the number of shares to the capital stock of the Buffalo Railway Supply Company, a corporation formed under the laws of the state of New York, and having a capital stock of two hundred thousand dollars, divided into two hundred shares, at a par value of one hundred dollars," etc.
By the interlineation it was made to read: “Having a capital stock of one hundred thousand dollars, which is to be increased to two hundred thousand dollars," etc.
The company had not been organized at the time the defendant made his subscription. In the articles of association, when filed, the stock was fixed at $100,000, with a statement that it was to be increased to $200,000. How the capital came to be fixed at $100,000 instead of the larger sum was not made to appear upon the trial, and nothing is stated in the answer in reference thereto. Who was responsible for the change, or whether it was made with or without the knowledge and consent of the defendant, was not made to appear. There was no allegation in the answer that the alteration was fraudulently made, or that the defendant was in any manner injured thereby. We see no reason for setting aside the verdict. Defendant's exceptions should be overruled, and judgment directed for the plaintiff upon the verdict.
(75 Hun, 350.)
FANCHER 8. NEW YORK, L. E. & W. R. CO. (Supreme Court, General Term, Fifth Department. January 18, 1894.) NEGLIGENCE-EVIDENCE-QUESTION FOR JURY.
In an action by a locomotive fireman for injuries received in the performance of his duties, it appeared that while shaking the grate of the engine his hand slipped from the shaker because of the defective condi. tion of the grate and at the same time his feet slipped on the floor of the engine, which a leaky water tank had rendered wet and slippery, and he fell out of the engine. The grate in question was different in construction from the kind plaintiff had been accustomed to, and he was not aware of its condition, or of the defect in the tank, until just before the accident. Held, that the questions of negligence and contributory negligence should have been submitted to the jury. Action by William H. Fancher against the New York, Lake Erie & Western Railroad Company. Plaintiff moves for a new trial on exceptions ordered to be heard at general term in the first instance. Granted.
Argued before DWIGHT, P.J., and LEWIS, HAIGHT, and BRADLEY, JJ.