First National Bank v. Lenk — 32 N.Y. St. Rep. 191

Majority

p. 191

The First National Bank of Jersey City, Resp’t, v. Peter Lenk et al., App’lts.

(Supreme Court, General Term, First Department

Filed June 6, 1890.)

Headnote

Pasties — Executors of joint debtor who dies pending action cannot BE JOINED WITH SURVIVORS.

The rule that where one of two or more joint debtors dies his personal representatives should not be joined in an action with the survivors, except upon the allegation of the insolvency of the survivors, applies to the case of the death of a joint debtor pending the action and is not altered by § 758 of the Code.

Appeal from an order at a special term reviving and continuing this action against Emilie Huber, Otto Huber and Louis V. Schuler, executors of the last will and testament of Otto Huber, deceased, as defendants, in place of the said Otto Huber, deceased, and bringing in the executors as defendants by a supplemental summons and complaint, and ordering that the action proceed as one action against the survivors of the original defendants and the said executors.

Action upon a number of promissory notes made for the accommodation of and delivered to the firm of Peter Lenk. & Co., and now held by plaintiff. The original defendants were Peter Lenk, Carl P. Lenk, Budolph Lenk, Otto Huber and John Lin

p. 192

denmeyr. The complaint alleges that the defendants were all general partners in said firm of Peter Lenk & Co., the defendants Huber and Lindenmeyr becoming such by reason of their failure to pay in cash to the said firm the respective amounts of $50,000 and $20,000 certified by them to have been contributed as special partners to the common stock of said firm, and by reason of the falsity of their certificates of such payments. Subsequently defendant Huber died, and letters testamentary were, upon probate of his will, issued by the surrogate of Kings county to Einilie Huber, Otto Huber and Louis Y. Schuler. Upon these facts the order in question was made.

Hamilton Wallis, for app’lts; L. Untermyer, for resp’t.

The following is the opinion rendered at special term:

I do not agree with the counsel for Huber’s estate that an action against a special partner seeking to make him liable as a general partner for failure to pay in, in cash, the amount certified to have been contributed, is an action to recover a penalty. The action is against him upon contract, treating him from the beginning as a general partner, and liable as such. That is the normal condition of things, and it is for the special partner to limit his ordinary partnership liability by a strict compliance with the statute. Failure to so strictly comply does not give a right of action as for a penalty. It simply prevents the partner from setting up the statute against the ordinary partnership liability which he has assumed. In this view of the matter, the action is plainly upon contract, and it survived. The other objection, namely, that insolvency of the surviving partners must be averred before the representatives of the deceased partner can be brought in, is met by § 758 of the Code. Certainly, “the proper disposition of the matter,” to quote the language of this section, requires that the representatives of the deceased special partner, who was sought to be charged, should be brought in. Thus the real question involved in the action can be directly determined. This becomes entirely apparent when we consider that the persons who were .avowedly general partners have not defended; and, so far as the other special partner also sought to be charged is concerned, it is entirely appropriate that his liability should be determined at the ■same time as that of Huber. I think that the learned counsel for the Huber estate is also in error in supposing that § 758 is confined to cases where the contract liability is in terms several as well as joint The language is, “the estate of a person or party jointly liable upon contract with others, shall not be discharged by his death,” etc. The matter of several liability is only referred to in connection with a severance of the action. But the liability here, if there is any, would seem to be joint and several. The question is, therefore, reasonably free from doubt, and the-motion should be granted.

The rule is well established that where one of two or more joint debtors die, his personal representatives should not be joined in an action with the survivors, except upon the .allegation of the insolvency of the survivors.

p. 193

We see no reason why this rule does not apply to the case of the death of a joint debtor pending the action. Section 758 of the Code has in no manner altered the rule stated, which has been established by a long line of decisions.

The order should be reversed, with ten dollars costs and disbursements.

Van Brunt, P. J., Brady and Daniels, JJ., concur.