Brinckerhoff v. Bostwick — 6 N.Y. St. Rep. 728

Majority

p. 728

Theodore Brinckerhoff et al., Resp’ts, v. Henry Bostwick et al., App’lts.

(Supreme Court, General Term, Second Department,

Filed February 15, 1887.)

Headnote

1. Negligence in performance of duties by bank directors—Action FOR DAMAGES FOR, IS COMMON LAW ACTION.

The complaint in this action charged the defendant with mismanagement and gross negligence in conducting the affairs of a bank whereby the corporate fund was wasted, there being no allegations of misappropriation of funds by them, and demanded judgment for damages. Held, that the' action was one at common law for the recovery of damages independently of statute.

2. Same—Is triable by jury.

Held, that the action was properly triable by jury, and that an order denying a compulsory reference of the issues should be affrmed

Thompson, Weeks & Lowe, H. A. Wilson, J. S. Van Cleef,, ■for app’lts; J. F. Schlosser and O. D. M. Baker, for resp’ts»

Cross-appeals from orders are presented to the court in this action.

One by the plaintiffs from an order denying a motion to send the cause to a referee to hear and determine, and one by the defendants from an order striking the cause from the calendar of the circuit court and directing its trial by the court without a jury.

This cause, from its commencement, has presented serious and embarrassing difficulties, and the question now presented equals in importance to the parties any that have gone before it.

Uncontrolled by any intimation of that court of appeals when the cause was last in that court, we would conclude that the action sounded in tort and that the defendants had the constitutional right to a trial by jury. •

The allegations of the complaint consist almost entirely of charges of negligence and fraud of the defendants in the discharge of their duties, and the demand for judgment is for damages and not for specific relief.

The defendants are not charged with personal misappropriation of the funds of the bank, but it is alleged that they suffered the corporate fund to be wasted and lost by gross negligence and inattention to their duties.

The action is, therefore, an action at common law for the recovery of damages independently of any statute. Yet the last opinion of the court of appeals contains this language: “This is unquestionably an equitable action. * * * So this action for the purpose of determining the limitation of time applicable to it must be governed by the same law which would have been applicable if the action had been brought by the bank. The action is against the directors as trustees to call them to account for the manner in which they discharged their trust, and is one over which courts of equity always have jurisdiction.”

These words standing alone would seem to indicate that the action was one of equitable cognizance alone to be tried by the court without a jury. But the same opinion contains this language also: “It is not claimed that the liability which the plaintiffs seek to enforce in this action against the directors is one created by any statute* but as we held when the case was here before, it is a common law liability springing out of their relations to the bank and the manner in which they discharged, or omitted to discharge, their obligations and duties as directors thereof.”

Finding nothing, therefore, to aid or direct us in the former decisions in the court of appeals in this case, we are inclined to rest our decision upon principle and upon the authority of the decision in the court of appeals in the case

p. 730

of Hun v. Cary ( 82 N. Y., 65 ), where it was held in a case like this that the action was properly tried as an action at law by a jury because the only relief sought was a money judgment.

The order denying the motion for a reference should, therefore, be affirmed, with ten dollars costs and disbursements, and the order striking the cause from the calendar of the circuit court should be reversed, with ten dollars costs and disbursements.

Barnard, P. J., and Pratt, J., concur.