In re Harwood — 50 N.Y. St. Rep. 114

Majority

p. 114

In the Matter of Grove M. Harwood et al., Impl’d, Resp’ts.

(Supreme Court, General Term, First Department,

Filed December 16, 1892.)

Headnote

Costs—Pasty beneficially interested—Code Civ. Peo., § 3247.

One who is not a transferee of the cause of action and who merely, in good faith, furnishes funds to a plaintiff to enable him to carry on the action, is not a person beneficially interested within the meaning of § 3247 of the Code, and cannot be compelled to pay the costs awarded to the defendants in such action.

Appeal from order directing I. M. Taylor to pay to the petitioners Harwood & Buel the costs awarded to them in the action of George L. Strong against said petitioners.

Charles Strauss, for app’lt;

Grove M. Harwood, for resp’ts.

The application to compel Taylor to pay the costs of the action instituted by Strong was founded mainly upon the alleged fact that he, Taylor, was a party beneficially interested in that action, and was consequently liable for costs under the provisions of § 3247 of the Code of Civil Procedure. That section provides that where an action is brought in the name of another by a transferee of the cause of action or by any other person who is beneficially interested therein * * * the transferee or other person so interested is liable for the costs, in the like cases and to the same extent as if he was the plaintiff.

Taylor was not the transferee of the cause of action, and the question, therefore, is whether he was beneficially interested therein. We have examined the affidavits which were presented to the court at special term, and we think the petitioners failed to show that Taylor had any interest in the action direct or indirect The action was not brought by Taylor in the name of Strong. It was not brought by Taylor at all. It was by Strong in his own name,

p. 115

and either for his own benefit or for the benefit of someone other than Taylor. It is quite true that he brought the action on Taylor’s suggestion, and that Taylor agreed to let him have the money to pay his attorneys. But Taylor did not even employ the attorneys. Taylor felt that the action was a righteous one, and that something should be done to compel the petitioners to restore certain moneys which were the subject matter of the action. We think that Taylor acted in good faith, and in the honest belief that the petitioners should be compelled to account to those whom he believed had been wronged. If Strong had succeeded in the action, Taylor would have received no part of the sum recovered, either directly or indirectly.

It also clearly appears that the assignment to Strong, under which he was enabled to bring the suit, was obtained without any action on Taylor’s part. In no just sense, therefore, was Taylor a person beneficially interested in Strong’s action within the meaning of the section to which we have referred. It was simply a case of a person who, deeming the action righteous, was willing to assist the plaintiff with his purse in carrying it on. This did not justify an order compelling him to pay the costs.

The respondents claim that the order should be sustained upon other grounds, namely, upon the common law ground that it was a false action instituted by Taylor in the name of another; and also that Strong, by taking the assignment in his own name, became the trustee of an express trust for the benefit of Taylor, who _ was the real party in interest. |

Both o£ these positions are weaker than the main contention. Strong’s action was not a false or fictitious one. Nor was there any trust relation created by the assignment. If the affidavits presented upon the motion at special term were insufficient to show that Taylor was beneficially interested in Strong’s action, they were certainly insufficient to sustain these other contentions. There was, in our judgment, no foundation, as matter of fact, for an order requiring Taylor to pay the costs.

The order appealed from should, therefore, be reversed, with the usual costs and disbursements, and the motion denied, with costs.

Van Brunt, P. J., and O’Brien, J., concur.