National Mechanics' Banking Ass'n v. Usher — 31 N.Y. Super. Ct. 403

Majority

p. 403

THE NATIONAL MECHANICS’ BANKING ASSOCIATION OF NEW YORK, Plaintiff and Respondent, v. ROBERT USHER, Jr., Defendant and Appellant.

Headnote

Where leave is granted to the successors of a corporation to bring an action upon a judgment obtained by that corporation, the Code does not require that the action should be brought in the same court in which the judgment was originally obtained

Before Barbour, C.J., McCunn and Fithian, JJ.

[Decided July 2, 1869.]

Appeal from an order of Mr. Justice Jones, at Special Term, allowing the respondents, as the successors of “ The Mechanics’ Banking Association,” to bring an action against the appellant, upon a judgment recovered in 1854, to test the validity of an insolvent’s discharge.

Mr. John Graham for appellant.

“ The Mechanics’ Banking Association ” (the original plaintiff in the judgment in question) claim to have become “ The National Mechanics’ Banking Association of New York,” under and in pursuance of the act of Congress of June 3,1864 (on that subject), and the enabling act of the legislature of this State, passed March 9, 1865 (Laws of 1865, chap. 97). By section 2 of the latter act, banks becoming national associations under the act of Congress were deemed to have surrendered their charters, and were authorized (by being continued as bodies corporate, with that view) to use their names for the term of three years after the term of such surrender, to prosecute and defend suits, to close their concerns, and to dispose of and convey their property, but not to carry on the business of banking.

Section 6 provided that the certificate of the “ Comptroller of the Currency,” authorizing such banks to commence business

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under the act of Congress, should instantly vest all their assets, real and personal, in the national banking associations into » which they were transformed.

It is evident that any legal rights of the banks thus transformed, in reference to .existing choses in action, were to be asserted in the original names of those banks, and a term of three years was allowed under that idea. It is meant to insist, that any legal proceedings not commenced, upon existing causes of action, within the three years, were cut off. by that term as a kind of statute of limitations, and that, after the expiration of that limitation, neither the original nor the changed name of the bank could be used to enforce causes of action which could and ought to have been enforced before the limitation expired.

If the order of the Special Term was correctly granted, it should have required the action to be brought in this Court, if not as a matter of strict right, at least of sound discretion. Section 71 of the Code is a part of a system introduced by the Code, intended to supersede the proceeding by soire facias, when resorted to either as a public or private remedy (Alden v. Carle, 11 How. P. R., 209 ; Thurston v. King, 1 Abb. P. R., 126 ). Scire facias was a judicial writ, and could only issue from the court in which the judgment sought to inforce was rendered (Graham’s Practice, 2d ed., 819).

Mr. P. J. Gage for respondent.

The plaintiff was entitled to leave to sue, by showing that the judgment named in the moving papers was still unpaid, and the whole amount thereof due to the plaintiff when these facts were shown; good cause was shown within the meaning of the statute (Code, sec. 71).

The interposition of the pretended discharge of the defend- ■ ant under the insolvent act was no objection to granting such leave, as it was clearly shown to the Court that such discharge was granted without jurisdiction. .

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By the Court:

This is an appeal from an order of the Special Term, permitting the plaintiffs to bring an action upon a judgment recovered in 1854, by “ The Mechanics’ Banking Association of ISTew York,” then organized under the laws of this State, against the defendant; the principal object of such contemplated suit being to test the validity of an insolvent’s discharge, which was granted to the defendant subsequently to the recovery of the judgment.

Without pausing to inquire, in this case, whether an insolvent’s discharge from his debts can properly be inquired into in a collateral proceeding, such, for instance, as a motion to set aside an execution, Or otherwise than in an action to which such discharge may be pleaded in bar of a recovery (see 2 R. S., sec. 87), it is sufficient to say that an action upon the judgment in this case will afford the easiest, simplest, and most certain means of obtaining a full and complete "adjudication of the question as to whether the defendant is released therefrom by the alleged discharge.

The point of the defendant, that the order ought to have directed the action to be brought in the Superior Court, does not appear to be well taken. The Code (see. 71) does not require such a condition to be inserted in the order; and we may, therefore, assume that the legislature designed to leave to plaintiffs, in actions upon judgments, the same common-law right to select the forum in which to bring their suits that other plaintiffs possess.

The question raised by the defendant’s counsel, that the proposed plaintiffs cannot sustain an action upon the judgment, as the mere successors of a defunct corporation, may become an important one upon the trial, or on demurrer; but it is a question that cannot, properly, be determined upon a motion like this.

The order should be affirmed, with costs.

McCunn, J., dissented.