Ferguson v. Gill — 81 N.Y. Sup. Ct. 566

Majority

p. 566

James H. Ferguson and Another, as Surviving Partners, etc., Respondents, v. George H. Gill, Appellant.

Headnote

Manvfaaturing Act of 1848 — false certificate — individual liability — review of orders setting aside verdicts.

In an action brought to enforce the individual liability for the debts of a corporation imposed by the Manufacturing Act (Laws of 1848, chap. 40, § 15), against officers of the corporation who have knowingly signed a false certificate, the burden is placed upon the plaintiff of establishing that the certificate filed was in point of fact false, and that the defendants signed it with knowledge of its falsity.

When a trial judge becomes impressed with the preponderance of the evidence in favor of the party against whom a verdict has been rendered, or thinks that injustice has been done by the verdict, it is a proper exercise of the power vested in him, to set aside the verdict upon the ground that it is contrary to-the weight of evidence. (§ 999, Code Civ. Proc.)

The reasons for sustaining, on appeal, an order made by a trial judge setting aside a verdict are not limited to the reasons assigned by the trial judge for his action; but when there are other reasons for setting aside the verdict they must he given due weight.

A correct decision should stand, whether all the reasons therefor be assigned or not.

Appeal by tlie defendant, George II. Gill, from an order of the Supreme Court, made at tbe New York Circuit and entered in the office of the clerk of the city and county of New York on the 21th day of January, 1893, setting aside a verdict in favor of the

p. 567

defendant rendered by tlie jury and granting a new trial upon tbe plaintiffs’ motion made upon the minutes.

Charles E. Rushmore, for the appellant.

Benjamin Estes, for the respondents.

This action was brought to enforce a liability against defendant, for certain debts of a corporation organized under the Manufacturing Act (Laws of 1848, cliap. 40), on tbe ground that be, being a. trustee of that company, joined in tbe making and filing of a false-certificate that tbe capital stock of tbe company bad been paid in., Tbe trial resulted in a verdict for tbe defendant, and thereupon the, plaintiffs moved tbe trial court on tbe minutes to set aside tbe verdict and grant a new trial on tbe ground that it was against tbe evidence, and on tbe ground of rulings made upon tbe trial, and upon all tbe grounds mentioned in section 999 of tbe Code of Civil Procedure. Tbe motion was granted, and it is from tbe order granting such motion that tbe defendant appeals.

In tbe memorandum filed by tbe learned judge be says : “ I am of the_ opinion that tbe verdict rendered by tbe jury was contrary to tbe evidence.” Tbe liability sought to -be enforced was predicated upon tbe 15th section of tbe Manufacturing Act of 1848, which reads as follows: “ If any certificate or report made or public notice given by tbe officers of any such company in pursuance of tbe provisions of this act should be false in any material representation, all tbe officers who shall have signed tbe same, knowing it to be false, shall be jointly and severally liable for all tbe debts of the-, company contracted while they are stockholders or officers thereof.”'

It will thus be seen that tbe burden was placed upon tbe plaintiffs-of establishing two things : First, that tbe certificate filed was in point of fact false, and second, that with knowledge of its falsity the-defendant signed it. Upon an examination of tbe evidence we think that a preponderance thereof inclined to tbe view that the burden, upon tbe first question as to tbe certificate being false in point of’ fact was sustained.

Upon the second question as to whether tbe defendant knowingly signed it, there was an undoubted conflict of evidence, and neither-

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side took exception to tlie presentation by 1 he court of this question to the jury. Subsequently to the rendition of the verdict, and. upon consideration, the trial judge, as shown by the memorándum, reached °the conclusion that the verdict of the defendant was contrary to the weight of evidence, and upon this ground granted the motion.

In passing upon a motion of this character it must be remembered that the trial judge has had the advantage of seeing the witnesses, 'hearing their testimony, noting their manner and of becoming impressed with the weight to be attached to evidence offered, which it is impossible to have photographed upon the record on appeal. And in a case where lie becomes impressed with the preponderance in favor of either side, or thinks that injustice has been done by the verdict, it is a proper exercise of the power vested in him to set aside such a verdict. We are unable to see that the power thus vested in the trial judge has in this instance been abused.

But, apart from the ground upon which he placed his decision, we think that there are other reasons, which are available upon appeal, though not referred to in the memorandum of the trial judge in granting the motion, which would have justified the disposition made.

The most we think that could be claimed by the defendant upon this question of the known falsity of the certificate is, that upon the evidence it was a close one, and the effect of immaterial or incompetent evidence cannot be overlooked, because it is difficult to determine what effect such., testimony may have had on the minds of the jurors. Thus, in this case, against the objection and over the exception of the plaintiffs, considerable testimony was admitted tending to show that one of the plaintiffs, Ferguson, was cognizant of the steps leading up to the formation of the corporation; that he had knowledge of the way in which it was proposed to issue the stock, and of the slight value of the patent in payment for which the entire capital stock of $100,000 was issued. That the plaintiffs, or either of them, aided or abetted in the plan by which the fcntire capital stock was issued for the letters patent is not claimed, and in the absence of such a contention or issue we fail to see how their knowledge of what was done by the corporation, or of the value of the patent can affect the question of whether or not the defendant knowingly signed the false certificate. We think that such evidence

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was both incompetent and immaterial, and, no doubt, tended to prejudice tbe plaintiffs with tlie jury.

Tliere are other rulings to which exceptions were taken by plaintiffs equally good; but we think sufficient has been said to show that where there are other reasons than those assigned by the trial judge for setting aside a verdict, these must be given due weight upon an appeal such as this — the rule being that a right decision should stand whether all the reasons be assigned or not. (Marvin v. Universal Life Ins. Co., 85 N. Y. 278 , 284.)

The order should be affirmed, with costs and disbursements.

Van Brunt, P. L, and Parker, J., concurred.

Order affirmed, with costs and disbursements.

Cases cited

Marvin v. Universal Life Insurance 85 N. Y. 278 N.Y. 1881-05-10 at 284 p. 569