Quigley v. Walter — 32 N.Y. Super. Ct. 175

Majority

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CLINE QUIGLEY, Plaintiff, v. ELWOOD WALTER, Defendant.

[Decided December 31, 1869.]

Headnote

, The Code has changed the rule In respect to actions upon a joint and several contract.

Where defendants are jointly liable, the plaintiff may proceed against such as are served, and obtain a joint judgment against all, which may be enforced against their joint property, and against the separate property of the defendant served.

Upon a several liability the plaintiff may proceed against the defendants served in the same manner as if they were the only defendants.

Upon a contract both joint and several, one or more, and less than the whole, of the contractors may be sued.

Previous to the Code upon a joint and several liability, each must have been sued separately, or all jointly. Two, or any greater number less than the whole, could not be sued in the same action.

In action against two of four trustees of a corporation, upon a liability joint and several—held, not a misjoinder under the Code.

Before Barbour, C.J., Monell and Freedman, JJ.

This ease was tried before Hr. Justice Fithian and a jury.

The Blacldieath Goal Company, incorporated under the general act for the incorporation of mining companies, was indebted to the plaintiff for goods sold and delivered.

There were four trustees, and the company had failed to make and file an annual report, as required by the statute, whereby the trustees became jointly and severally liable for the debt.

Two only of the trustees, namely, Joseph F. Joy and El wood Walter, were named as defendants in the summons and complaint. Walter alone was served. Joy was not served, nor did he appear in the action.

Walter, the party served, answered, alleging that the plaintiff ought not to maintain the action, because at the time of the sale and delivery of the goods to the company, William H. Ashfield and Silas B. Dutcher were, jointly with the defendant, trustees

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of said company, and were living and within the jurisdiction of the court.

At the trial the defendant moved to dismiss the complaint, on the ground that the suit was brought against two of the trustees? without joining the others. Thereupon, the plaintiff moved to amend by striking out the name of Joy, alleging that he had not been served. The motion was denied.

The court directed a verdict against Walter only.

The only exceptions by the defendant were to “ the refusal of the judge to dismiss the complaint ” (although the ease does not show amy sueh refusal, except inferentiaUy, perhaps), and to the rejection of some evidence offered.

These exceptions were ordered to be heard at the G-eneral Term.

Mr. Alfred Dickinson for defendant.

This is a common-law action, and not an action under the statute. The statute merely declares the liability of the trustees (jointly and severally) in certain casps for the indebtedness of the corporation, and leaves the enforcement thereof subject to the common-law rules and practice (Corning v. McCullough, 1 Comst., 47).

The right of action is founded on contract. The goods were delivered to the corporation upon the promise, express or implied, that the corporation would pay for them. That was a contract, and the 35th section of the act merely declares that the trustees on their failure to file and publish the annual statement, as therein provided, shall be liable for the debts of the corporation. It does not declare in what manner an action may be commenced against them, but merely declares that they shall be “jointly and severally ” liable.

By the rule of the common law in actions of contract, persons jointly or severally liable must be sued severally or all must be joined in the action. And if more than one is made defendant and not the whole, the defendant’s answer of non-joinder is good in abatement (1 Chitty Pldgs., p. 30, and authorities therein cited; Strong v. Wheaton, 38 Barb., 623 ).

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The words “jointly and severally” have a, legal meaning, and wherever found must receive the construction they have always received, and the course of legal proceedings and pleadings thereunder for the enforcement of rights against persons so liable must conform to the law so settled and established, except so far as the Legislature by special act shall have altered them.

bio alteration has been made in this by the Legislature. Section 120 of the Code, which prescribes that persons severally liable upon the same obligation, etc., does not apply,to a case of this kind (Strong v. Wheaton, 38 Barb., 616 ).

The practice in all cases not excepted by the 120th section of the Code, must be governed by the old settled and established rule and practice.

In making the trustees liable for the debts of the corporation, the Legislature did not alter nor intend to alter that rule, but having used the words only, they left them to be applied under the settled practice of the courts.

This is held in the case of Strong v. Wheaton (38 Barb., p. 623), in an action against stockholders of a corporation, and the reasoning applies with full force to this case.

Mr. George C. Genet for plaintiff.

The offer of defendant to prove that the company had published its annual report, and delivered it to some one of their number to file, whom they did not pretend had done so, was immaterial, and properly excluded.

The offer to prove that a judgment had been recovered against the company in Pennsylvania, and its property there sold thereunder, was also wholly immaterial, and properly excluded (Parsons v. Eureka Powder Works, 18 N. H. R.)

The motion to dismiss the complaint on the ground “ that the suit was brought against two of the trustees without joining the others, wherefore defendant was entitled to judgment in his favor on his plea of non-joinder, otherwise that the action could not be sustained against the defendant Walter,” was properly denied.

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By section 12 of the act of 1848, defendant Walter was separately liable for the plaintiff’s debt.

The rule formerly was that if there was a joint and several liability, and plaintiff by uniting two or more defendants had elected to treat it as a joint liability, he must be held to it, and could not recover against defendant on his individual liability ( 19 Wend., 644 ; 3 Hill, 476 ; 4 Hill, 37 ).

But this rule has been changed by§§ 136-274 of the Code, which allows a separate judgment whenever a separate suit might have been brought, or a separate liability is shown by the evidence (Marquat v. Marquat, 7 How. P. R., 426 ; 2 Kernan, 340; 15 Barb., 528 ; 16 Barb., 33 ; 28 Barb., 666 ).

This is not a contract debt. It is an action for a penalty for which each of the trustees is liable and all are liable collectively. It is an action to recover a penalty imposed by statute.

It is an action rather ex delicto than ex contractu. The defendants are tort feasors rather than contract debtors. Plaintiff was not bound to prosecute all; and although a plea in abatement is permitted in case of the non-joinder of debtors, the privilege does not extend to tort feasors; all are regarded as principals, and neither the omission to sue all, or, if all are sued, the dismissal of one of them from the suit, can be pleaded by the other parties i'n bar (Bailey v. Berry, 8 Am. Law Reg., p. 273).

By the Oourt:

The question presented by the motion to dismiss the complaint, assuming the exception to be sufficient to raise it, is whether, in an action nominally against two of four trustees, and one only served, a judgment can be rendered against such one.

The liability created by the statute is joint mid several. Previous to the Code, upon such a liability the plaintiff could proceed against the parties jointly, or against each party separately. Two, or any greater number less than the whole, could not be sued in the same action.

The Code has, I think, changed the rule. The provisions of ithe 136th section apply to defendants jointly as well as severally

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liable. Where defendants are jointly liable, the plaintiff may proceed against such as are served, and obtain a joint judgment against all, which may be enforced against their joint property, and against the separate property of the defendant served. Upon a several liability, the plaintiff may proceed against the defendants served in the same manner as if they were the only defendants.

These provisions are not new; they existed before the Code (2 R. S., 377, section 1, Sess. Laws, 1833, p. 395; section 3, id., 1835, p. 248), the only difference being, that the Code is extended to all contracts creating a several liability. The third subdivision, however, is new, and was designed to relieve parties from the consequences of failing to prove a joint liability, which formerly was an inevitable nonsuit. Under that subdivision all the defendants must be served. Then judgment may be taken against any or either severally, if the plaintiff would have been entitled to such judgment if the action had been against such defendant alone. Such is the construction of the third subdivision by the Court of Appeals in the recent case of Fielden v. Lahens (6 Abb. Pr. R., N. S., 341, 349), which follows the earlier case of Blodgett v. Morris (14 Abb. Pr. R., 486). In the latter case the court say that the provision applies to all actions, whether they be upon a joint liability only, or one which is both joint and several; that the object of the provision was to prevent a non-suit where a cause of action was made out against some, although not against all of the defendants, and that it was not intended to change the law in any other respect, but simply applies to actions upon contract the same rules which at common law were applied to actions for torts.

Upon a joint obligation, all the obligors must be sued. If less are sued, the non-joinder of the others can be successfully pleaded in abatement. Upon a several obligation, the rule is so far otherwise that the plaintiff may have a several judgment, although there is nothing in the provision expressly authorizing a suit against two or more, and less than the whole of the obligors severally liable.

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But the 120th section is yet more explicit. It provides that persons severally liable upon the same obligation may all or any of them be included in the same action.

The effect of this section upon the contmon-law rule has-been declared in several cases. In De Ridder v. Schermerhorn ( 10 Barb., 640 ), the court say a plaintiff is now allowed, upon a joint and several contract, to sue any one or more in the same action. That case did not, however, necessarily require a construction of the 120th section, as the action was upon, an alleged joint contract. But the design and effect of the section was illustrated by the case of a joint and several contract. But Brainard v. Jones (11 How. Pr. Reps., 569) was upon a joint and several agreement. Two only of the contractors were sued, one of whom demurred, on the ground of the improper non-joinder. The court sustained the action, overruling the demurrer, under the section referred to. The only question in that case was, whether the section was not confined to actions upon bills and notes, and it was held not to be.

And in Harrington v. Higham ( 15 Barb., 528 ) it is said that under the 274th section (which must be taken in connection with the 120th and 136th sections) there may be a judgment against one or more, whenever a several judgment, upon the facts of the case, would be proper. This is allowable, irrespective of the character of the complaint, whether it alleges a joint or several liability. The true criterion now is, the court say, whether a sepa/rate action might home been maintained. H it could, a several or separate judgment is proper.

In Parker v. Jackson ( 16 Barb., 33 ), which was an action upon a joint and several promissory note, the section received the same interpretation, although the precise question was not involved.

In Strong v. Wheaton ( 38 Barb., 616 ) the action was against stockholders of a corporation to enforce their individual liability, which was'-joint and several. On the trial it appeared that some only of the stockholders had been sued. The objection of misjoinder was taken, and overruled on the ground that it should

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have been set np in the answer. The court sustained that ground of the decision and conceded that the rule of the common law had been changed. The decision in Brainard v. Jones (supra) was approved, and held to apply and govern that case, if the subject-matter of the action was an obligation or instrument. It was held not to be, and, therefore, not reached by the 120th section.

If the case at bar rested wholly under that section, it might be said of it, that the cause of action, which is similar to that in Strong v. Wheaton, was not reached by the section. But, without interfering with that decision in which the second subdivision of section 136, as well as the 274th section, is entirely overlooked, it is enough that in actions against defendants severally liable, it is expressly provided in the section referred to, that the plaintiff may proceed against such as are served as if they were the only parties proceeded against.

This general effect of all the sections referred to, is given in the case of McIntosh v. Ensign (28 N. Y. R., 172).

If the remark in Blodgett v. Morris (supra), that it was intended to apply to actions on contracts the same rules which at common law were applied to actions for torts, is correct, then it is clear no misjoinder or non-joinder of defendants can be alleged in abatement. Under the former practice a non-joinder of defendants in the latter class of actions could not be taken advantage of in any way (Rose v. Oliver, 2 John R., 365; 1 Chitty Pl., 86; Brown on Actions, 314).

It seems to me, therefore, that the rule of the common law is changed, and if the liability is several, although it may be joint' also, the plaintiff may sue one or more and less than the whole of the joint and served contractors, and have a separate judgment against such as are served.

But there are other reasons why the verdict in this case should not be disturbed.

The defense of the non-joinder of Ashfield and Butcher was certainly unavailing, if Walter was the only trustee sued. Joy was merely named as a defendant. He was not served; he did not appear in the action, nor was he a necessary party, as the

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action would have been complete'against Walter alone. The defendant Walter cannot be presumed to have known of the non-service of process on his co-defendant, and he was, therefore, in a position to raise the question by insisting .upon the non-joinder of tile other trustees as a defense.

At the time the motion to dismiss the complaint was made, Joy was a party defendant to the record, and the question was properly raised, whether the action could be maintained; and had the motion been decided adversely to the defendant,, and an exception taken to the decision, we would have been required to place our decision upon that ground alone. But the case does not show that any decision was made or exception tahen, and we should not be allowed to supply the defect by conjecture or-presumption.

Immediately, as the case shows, upon the motion to dismiss being made, the plaintiff moved to amend, by striking Joy’s name from the summons and complaint. The motion was at first granted, but upon terms with which the plaintiff refused to comply. The motion was then denied. But the motion to dismiss does not appear to have been decided.

The court had the power to make the amendment (Code, section 173), and had the motion prevailed, no doubt could be entertained that the verdict against the remaining defendant would stand.

At the close of the trial, however, the court did, in effect, what it had previously refused. By directing the verdict against Walter alone, Joy was effectually dropped out of the case, and to such direction there was no exception.

The plea in abatement was a purely technical plea. It did not enter into the merits of the action, or affect the liability of the defendant Walter. Had all the trustees been named defendants, and Walter only served, the result would have been the same as if he had alone been sued; for there would be no practical difference in the judgment; and if there is any right to require contribution, it is equal in the two cases.

Being a merely technical defense, it should be judged strictly,

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and as the ease presented to the General Term contains no exceptions applicable to that question, there is nothing left of the defendant’s case, unless the exclusion of some evidence was error. As we find none, judgment should be entered for the plaintiff upon the verdict.