Columbia Bank v. Jackson — 24 N.Y. St. Rep. 738

Majority

p. 738

Columbia Bank, App’lt, v. Thomas M. Jackson, Resp’t.

(City Court of New York,

General Term,

Filed March 27, 1889.)

Headnote

1. Pleadings—Complaint—Sueeicibncy oe—Banking association—Code Civ. Peo., § 3343.

A complaint, which alleges that “the plaintiff is, and at the times hereinafter stated, was a banking association created by and organized under the laws of the state of New York, with its banking house located and principally transacting business in the city of New York,” affirmatively shows that the plaintiff is a “ domestic corporation,” although these words are omitted therefrom.

2. Same—How may sue—2 R. S. (7th ed.), 1405, § 21.

The statute in regard to banking associations (8 R. S. [7th ed.], 1405,§21), provides that “all suits, actions or proceedings brought or prosecuted by or on behalf of said association, may be brought or prosecuted in the name of the president,” etc. Held, that the word “ may,” in the statute, is permissive only, and that the association may sue in its corporate name, as well as in the name of its president.

Appeal from judgment entered on order overruling demurrer.

C. M. Hall, for app’lt; J. H. Hildreth, for resp’t.

The demurrer was taken to the capacity of the plaintiff to sue, in this: that it does not appear whether the plaintiff is a domestic or foreign corporation, or a firm or co-partnership. Section 1775 of the Code, requires that the complaint by a corporation must state whether it is “a domestic or foreign corporation; and, if the latter, the state, country or government, by or under whose laws it was created,” but the complaint is not open to demurrer under this provision. The complaint alleges that “ the plaintiff is, and, at the time hereinafter stated, was a banking association created by and organized under the laws of the state of New York, with its banking house located and principally transacting business at the city of New York.” This affirmatively shows that the defendant is a “domestic” corporation, for having been incorporated under the laws of the state of New York, it could be nothing else. Code, § 3343, subd. 18.

It would have given no force or significance whatever to have added to what was already said, the words that it was a domestic corporation, for it could be nothing else, as it owed its existence to our own state statute. Whether the action was properly brought in the corporate name, or should have been brought in the name off its president, is the next question to be considered. A corporation being

p. 739

an artificial person, and, for some purposes, regarded as a person, has a legal entity, and may, as a rule, sue in its own name; but even this is a matter under legislative control. The power that creates may impose conditions upon the thing created, and may prescribe how it may sue and be sued.

The statute in regard to banking associations (2 R. S. [7th ed.] p. 1405, § 21), provides that “all suits, actions or proceedings brought or prosecuted by or on behalf of said association, may be brought or prosecuted in the name of the president,” etc.

Corporations created by and under the authority of ■statute law for specific purposes, are confined strictly to the powers so conferred upon them, and can only act in the prescribed manner. For this reason there is plausibility in the argument that the word “ may,” in section 21 of the statute before referred to, is equivalent to “must,” and that the action can only be prosecuted in the name of the president of the association, but all doubt upon the subject is put at rest by the decision of the court of appeals, holding that the word “may,” as used in the statute, is permissive only, and that the association may sue in its corporate name, as well as in the name of its president. Leonardsville Bank v. Willard, 25 N. Y., 574 ; see also 2 R. S. (7th ed.), p. 1530, § 1.

For these reasons we hold that the plaintiff had legal ■capacity to sue in its corporate name, that it is a domestic corporation, that the demurrer to the complaint was properly overruled, and that the judgment directed thereon in favor of the plaintiff must be affirmed, with costs.