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Second Department, April, 1910.

(Vol. 137.

PHILANDER B. ARMSTRONG, Respondent, v. Sun PRINTING AND

PUBLISHING ASSOCIATION, Appellant.

Second Department, April 22, 1910.

Libel - pleading – innuendo – promoter defined — words affecting one

in his professional capacity - words not libelous as to president of corporation.

An innuendo in a complaint for libel does not enlarge the meaning of the words;

its purpose is to define them, or to show that they relate to the plaintiff. “Promoter" of a corporation defined. A promoter does not necessarily have to do with the paying in of the capital of

the corporation. Nor is the president of the corporation necessarily connected

with its organization, even though he had been a promoter. Words that disparage au officer, professional man or trader are not actionable

per se. They must touch him in his office, profession or trade; that is to say, they must be shown to have been spoken of him in relation thereto and to be

such as would prejudice him therein. A publication which in substance alleges that the Attorney-General and Insur.

ance Department contend that the capital and surplus of a corporation when certified as having been paid in cash were to a large extent fictitious, and that the plaintiff is the president of the company, is not libelous as against him, if there be no statement connecting him with the fraudulent acts.

APPEAL by the defendant, the Sun Printing and Publishing Association, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 19th day of October, 1909, upon the decision of the court, rendered after a trial at the Kings County Special Term, overruling the defendant's demurrer to the complaint on the gronnd that it does not state facts sufficient to constitute a cause of action.

The action is for libel. The alleged libel and the innuendo are as follows: “Attack Gow Insurance Company. Jackson to ask for Receiver for the Excelsior. The company was a promotion of Wil. liam Gow and Howard Maxwell, and others concerned with them in the Borouglı Bank in Brooklyn and some insurance man, including Philander B. Armstrong, who is the President of the Company, and Eugene Van Schaick, its counsel. It is the contention of the Attorney-General, backed up by the Insurance Department, that the capital and surplus certified as having been paid in in cash were to a large extent fictitious.' (Meaning thereby that plaintiff and

App. Div.]

Second Department, April, 1910. others had fraudulently and for fraudulent purposes organized said Excelsior Fire Insurance Company with an alleged capital and surplus which were largely false and fictitious and that plaintiff and others had falsely certified to the said false and fictitious capital)."

Ilerbert C. Smyth [James M. Beck and Carl A. Mead with him on the brief], for the appellant.

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Henry A. Powell, for the respondent. JENKS, J.:

The odium of the article is that the Attorney-General, backed up by the Insurance Department, contends that the capital and the surplus certified as having been paid in in cash were to a large extent fictitious. No charge of any fault is made against the plaintiff save as it may be inferred from the statements that he was a proinoter and is the president of the company. It is not charged that the capital and surplus are fictitious, but that they were fictitious when certified.

Examination of the general statutes then applicable shows that a certain number of persons could become a corporation for fire insurance purposes by filing in the office of the Superintendent of Insurance a declaration, signed by all of them, of intention to form a corporation comprising certain specified particulars, including the amount of capital, which could not be less than $200,000, fully paid in in cash. Before it could carry on business a certificate of the Superintendent of Insurance that it had complied with all the requirements of law was necessary. But the Superintendent could not file the declaration or charter or grant such certificate until they were certified by the Attorney-General. (Ins. Law (Laws of 1892, chap. 690], SS 10, 12, 110, as amd. by Laws of 1893, chap. 725; Laws of 1898, chap. 171 ; Laws of 1900, chap. 366, and Laws of 1907, chaps. 206, 503.) After approval of the Attorney-General the statute (Ins. Law, $ 11, as amd. by Laws of 1893, chap. 725, and Laws of 1906, chap. 326) provided : “Examination by superintendent.— If the declaration and charter specified in the preceding section shall be approved by the Attorney-General, the superintendent shall thereupon cause an examination to be made by himself or by one or more competent and disinterested persons,

Second Department, April, 1910.

[Vol. 137. specially appointed by himn for that purpose, into the affairs of the corporation or proposed corporation. If such persons, after examination made, shall certify under oath, if it be a stock corporation, that the amount of capital required by law has been paid in and is possessed by it in cash, or is invested in the manner required by law; or if a mutual or co-operative corporation, that it has received and is in actual possession of the capital, premiums or engagements of insurance to the full extent required by law, the superintendent shall file such certificate in his department. Every such insurance corporation shall also deposit with the Superintendent of Insurance, before receiving authority to transact business in this State, such sums of money or securities as may be required by law.” On the other hand, I am not cited to any law that required promoters, organizers or officers of such corporations to make any certificate on this subject, and I do not find any provision to that effect in the statutes. The learned counsel for the plaintiff concedes in his printed points that part of the innuendo, “and that plaintiff and others had falsely certified to the said false and fictitious capital," “are to be treated as mere surplusage.” An innuendo does not enlarge the meaning of words; it is to define them or to show that they relate to the plaintiff. (Van Heusen v. Argenteau, 194 N. Y. 309.) Any charge that the plaintiff “fraudulently * * * organized” the company inust be found in the statement of promotion or in the statement that he is the president. In Dickerman v. Northern Trust Co.(176 U. S. 203) the court say: “A promoter is one who brings together the persons who become interested in the enterprise, aids in procuring subscriptions and sets in motion the machinery which leads to the formation of the corporation itself.' Cook on Stock and Stockholders, scc. 651. Or, as defined by the English statute of 7 & 8 Vict. chap. 110, sec. 3, "every person acting, by whatever name, in the forming and establishing of a company at any period prior to the company' becoming fully incorporated. See, also, Lloyd on Corporate Liability for Acts of Promoters, 17.” Cook on Corporations (6th ed. $ 651, p. 1876, n. 3) collates a number of definitions, and among them that given by LINDLEY, J., in Emma Silver Mining Co. v. Lewis (L. R. 4 C. P. Div. 396): “The term

promoter' involves the idea of exertion for the purpose of getting up and starting a company (of what is called 'floating' App. Div.]

Second Department, April, 1910. it), and also the idea of some duty towards the company imposed by or arising from the position which the so-called promoter assumes towards it.” Morawetz on Corporations (Vol. 1 [2d ed.], $ 545) says: “A person, who, by his active endeavors, assists in procuring the formation of a company and the subscription of its shares, is commonly called a promoter. The word 'promoter' has no technical legal meaning, and applies to any person who takes an active part in inducing the formation of a company, whether he afterwards becomes connected with the company or not.” Note: “In Whaley Bridge, &c., Co. v. Green, L. R. 5 Q. B. D. 109, 111, Bowen, J., said: “The term promoter is a term not of law, but of business, usefully summing up, in a single word, a number of business operations familiar to the coinmercial world, by which a company is generally brought into existence.'” Promoters are not the corporation (Battelle v. Northwestern Cement & Concrete Pavement Co., 37 Minn. 89), and the term does not imply that they become related to the corporation itself. (Morawetz, ut supra; Ex-Mission L. & W. Co. v. Flash, 97 Cal. 610.) A promoter, then, does not necessarily have anght to do with the payınent in of the capital or the cash of the corporation. The present president of a corporation is not necessarily connected with the organization of a corporation, even though he had been a promoter thereof.

But it is contended that the article is libelous per se. Words that disparage an officer, professional man or trader are not actionable per se. They “must touch the plaintiff in his office, profession, or trade;' that is, they must be shown to have been spoken of the plaintiff in relation thereto, and to be such as would prejudice him therein. They must impeach either his skill or knowledge, or attack his condnet therein.” (Odgers' Lib. & Sland. [3d ed.] 73, and cases cited.) The same author further writes : “Every authority which I have been able to find, either shows the want of some general requisite, as honesty, capacity, fidelity, &c., or connects the imputation with the plaintiff's office, trade or business. (Per Bayley, B., in Lumby v. Allday, 1 Cr. & J. at pp. 305, 306, cited with approval by Lord Denman, C. J., in Ayre v. Craven, 2 A. & E. at p. 8, and by Lord Herschell, L. C., in Alexander v. Jenkins (1892), 1 Q. B. at p. 800.)” The business of the plaintiff, so far as we are informed, is that of president of an insurance company. The charge virtually

Second Department, April, 1910.

(Vol. 137. is that certain State officials now contend that the capital and surplus of a corporation, when certified by these State officials as having been paid in in cash were to a large extent fictitious. Does such statement impute “any kind of fraud, dishonesty, misconduct, incapacity, unfitness or want of any necessary qualification” in the calling of him who is now the president of that company? I use the language of Starkie on Slander (4th ed. 188), approved and adopted in Moore v. Francis (121 N. Y. 205). It certainly does not connect that official in his vocation as the present president with acts with which he could have no concern, and which, for aught that appears, were done years ago.

I advise that the interlocutory judgment be reversed, with costs, and the demurrer be sustained, with costs.

BURR, Thomas, Rich and Carr, JJ., concurred.

costs, and demurrer

Interlocutory judgment reversed, with sustained, with costs.

Morris BLACKMAN, Respondent, v. Iron ClaD MANUFACTURING

COMPANY, Appellant.

Second Department, April 22, 1910.

Court - Municipal Court — vacating judgment - amendment to section

253 of Municipal Court Act is retroactive.

Chapter 304 of the Laws of 1907, amending section 253 of the Municipal Court

Act so as to authorize a justice of that court to vacate a judgment taken by default and without service of summons, is retroactive, as it affects the

remedy only. Hence, a judgment entered by default and without service of process prior to

said amendment may be vacated on a motion made after the amendment took effect.

APPEAL by the defendant, the Iron Clad Manufacturing Com. pany, from an order of the Municipal Court of the city of New York, made on the 31st day of December, 1909.

James, Schell & Elkus, for the appellant.

Charles Burstein, for the respondent.

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