Drew v. Keufer — 30 N.Y.S. 733

Majority

p. 733

(81 Hun, 144.)

DREW v. KEUFER et al.

(Supreme Court, General Term, Fifth Department.

October 17, 1894.)

Headnote

1. Corporations—Personal Liability op Directors.

Directors who employ a lawyer to dissolve the corporation are not personally liable to him for his services, unless they specially promised to pay him.

2. Pleading—Amendment—Changing Depense.

In an action to charge directors personally on an alleged joint promise-to pay for services rendered by an attorney in dissolving the corporation, some of defendants denied that they personally promised to pay plaintiff. The others denied that plaintiff performed the services mentioned in. the complaint. Held, that an amendment of the answer of the defendants-who denied performance of services, so as to deny a personal promise, was not a substantial change of the defense, since the same had already-been alleged by the other defendants.

8. Evidence—Conclusion op Witness.

In an action to charge directors personally for services rendered to a corporation, the question on whose credit plaintiff relied on performance-of services calls for the conclusion of the witness.

Appeal from judgment on report of referee.

Action by David Drew, as assignee of James 0. Sebring, against Fred. 0. Keufer, John J. Karle, and David E. Hoover, impleaded' with others, to recover for services rendered in proceedings to dissolve the Pleasant Valley Vintage Company, a domestic corporation.. The complaint was dismissed, and plaintiff appeals. Affirmed.

The plaintiff, by his complaint, alleges that the defendants were directors-of the Pleasant Valley Vintage Company, a domestic corporation, duly created, and that, at a meeting of the defendants, it was deemed advisable-for them to apply for a voluntary dissolution of the company, and thereupon James O. Sebring was duly authorized and directed by them to institute such proceedings; that he did so, by preparing a petition, which was signed- and verified by the defendants, and proceedings conducted by Sebring were thereupon had, pursuant to the statute, to such dissolution of the corporation, for and at the request of the defendants. The respondents only were-served, and they alone appeared. The alleged claim of Sebring for his services in the matter was assigned to the plaintiff.

Argued before DWIGHT, P. J., and LEWIS, HAIGHT, and. BRADLEY, JJ.

Walter S. Drew and James 0. Sebring, for appellant.

Geo. W. Hall, for respondents Keufer & Karle.

Briggs & Sunderlin, for respondent Hoover.

The facts found by the referee are to the effect that, at a meeting of a majority of the board of directors, proceedings were directed and taken, pursuant to the statute, for the voluntary dissolution of the corporation, and Hr. Sebring was employed as attorney to conduct them, and that he prepared their petition, wThich was presented, and the requisite proceedings were had to accomplish the purpose. Code Civ. Proc. §§ 2419-2429. This-proceeding was set in motion by the action of the defendants in their relation as directors of the corporation, and as such they made the-petition and caused the proceedings to be had. They were there -

p. 734

fore not personally liable to the attorney, unless they, by some special promise, undertook to pay him for his services. The referee found that they assumed no such personal relation to him by any individual promise to compensate him in the premises, and such finding is supported by the evidence. His conclusion that there was no personal liability of the defendants necessarily followed. The proceedings were those of the corporation by its constituted agencies. Skinner v. Smith, 56 Hun, 437 , 10 N. Y. Supp. 81 . The life of the corporation continued, until the final order was made dissolving it (Code Civ. Proc. § 2429; Iron Works v. Smith, 4 Duer, 362 ); and then the receiver appointed was, in practical effect, its representative for certain purposes.

The defendants Keufer and Karle, by their answer, put in issue the allegations of the complaint other than that the defendants were directors of the corporation. The defendant Hoover, by his answer, denied any knowledge or information sufficient to form a belief that Sebring performed all the services mentioned in the complaint, and alleged that his services were of little or no value to the corporation. Upon the trial a motion in behalf of the defendant Hoover, made to amend his answer by alleging denial of the employment of Sebring by the defendants as their attorney, was granted. This was opposed, and exception taken by the plaintiff’s counsel; and it is insisted that it was not within the power of the referée to grant it. Although his power to allow amendments is limited by the statute (Code Civ. Proc. §§ 723, 1018), we think the exception was not well taken. Treating the facts alleged in the complaint as sufficient to charge the defendants personally, their alleged contract, according to the rule at common law, must be treated as the joint contract of all the defendants, as nothing appears in the allegations to the contrary; and although the rule has been so modified by statute as not to render the misjoinder fatal when the joint liability of all the defendants is not established and the several liability of some of them is made to appear by evidence, the apparent liability alleged is that of all the defendants upon their joint promise; and nothing appeared in the evidence to distinguish the relation of the defendant Hoover to the alleged promise from that of the other defendants to it. The promise was alleged to have been made by the defendants jointly, and no attempt by evidence was made to show that it was otherwise. In that view the amendment of his answer made by defendant Hoover in denying that the defendants promised as alleged was not a substantial change of the defense, as the same had already been alleged by other defendants. Beyond that the amendment was immaterial.

The answer of witness Sebring to the question on whose credit he relied in performing the services was properly excluded upon the defendants’ objection. It called for the conclusion of the witness, rather than the facts upon which its determination depended; and it was quite immaterial whose credit he relied upon, unless his contract with the defendants or their promise permitted him to rely on their credit. That was- a question for the referee to determine.

p. 735

Merritt v. Briggs, 57 N. Y. 651 ; Pope v. McGill, 58 Hun, 294 , 12 N. Y. Supp. 306 .

There was no error in the rulings on the trial or in the determination of the merits. The judgment should be affirmed. All concur.

Cases cited

Merritt v. Briggs 57 N. Y. 651 N.Y. Comm'n App. p. 735