Van Pelt v. United States Metallic Spring Barbed Shoe-Heel Co.

Majority

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GILBERT S. VAN PELT, Plaintiff and Appellant, v. THE UNITED STATES METALLIC SPRING BARBED SHOE-HEEL COMPANY and others, Defendants and Respondents.

Headnote

I. Superior Court, Jurisdiction of, in Equity.

1. Has in an action pending therein full and complete jurisdiction over all equitable remedies and relief which can now be enforced or obtained in an action in the Supreme Court, or formerly by a bill in Chancery.

If The only limitation on this jurisdiction is, that the action must either be for a cause of action specified in § 133 of the Code, the subject of which cause of action, dr some part thereof, is situated in the city of New York; or be for a cause of action specified in § 134, which has arisen in said city; or be for a cause of action mentioned in subdivision 3 of § 33, or he one the defendants to which either reside, or are personally served with summons, in the city of New York.

3. A dissolution of a corporation, sequestration of its property, and the appointment of a receiver, under § 36, article 3, title 4, chapter 8, part 3, R. 8., can be obtained and enforced by action.

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II. Corporation.—Dissolution, Sequestration, etc.

1. A civil action will lie for.

2. In a civil action, commenced in the Superior Oourt, against a corporation organized and incorporated under the laws of the State of New York, and which was alleged to have had, at the time the cause of action arose, an office and place of business in the city of New York, to procure a dissolution of the corporation, a sequestration of its effects, etc., under the above Section of the R. S.

Held, on demurrer, by the corporation, to the complaint, that the Superior Oourt had full and complete jurisdiction over the subject of the action, and could grant the relief prayed for.

Kattenstroth v. Astor Bank, 2 Dues',- 632; Brahe v. Pythagoras Association, 4 Duer, 668 , so far as they conflict with the above propositions, are overruled.

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

Decided, November 30, 1872.

Appeal from a judgment for defendant on demurrer to the complaint.

The action was to dissolve the defendants’ corporation.

The complaint alleges that the defendant was a corporation duly organized under the general incorporating act of this State, and transacted its business in the city of New York.

That the plaintiff had recovered a judgment against such corporation, upon which an execution had been returned unsatisfied, and that such corporation was insolvent.

The relief demanded was a dissolution by the judgement of the court, of the defendants’ corporation, etc.

The defendant demurred to the complaint, stating, as ground of demurrer, that this court has no jurisdiction of the subject of the action.

The demurrer was' sustained at Special Term, and the plaintiff appealed.

Samuel Stevens, attorney, and of counsel for appellant.

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Edwin Kempton, attorney, and of counsel for respondent.

Previous to the abolition of the Court of Chancery, by the adoption of the constitution of 1846, that court had exclusive jurisdiction to entertain bills for the dissolution of corporations.

Neither the Supreme Court, nor any other common-law court, had poAver to entertain such a proceeding (2 R. S. 463, § 36).

The judiciary act of 1847 (Laws, 1847, ch. 280, p. 319, § 16) transferred to, and vested in, the Supreme Court all the equity jurisdiction and poAver Avhich had theretofore been possessed by the Court of Chancery, Avhich included, of course, its jurisdiction to dissolve corporations. By such transfer, the jurisdiction over such cases became exclusive in the Supreme Court, as it had theretofore been exclusive in the Court of Chancery; and such exclusive jurisdiction has continued in the Supreme Court to the present time, unless the legislature has, since the passage of the judiciary act, conferred a like jurisdiction upon other courts.

The Superior Court of the City of NeAv York Avas created by the legislature in 1828, with a common-laAV jurisdiction only. It possessed no equity powers or jurisdiction whatever.

The constitution of 1846 (Art. 14, § 12) continued the court with its then powers and jurisdiction, until the legislature should otherwise direct.

By the passage of the Code of Procedure in the year succeeding the passage of the judiciary act, the equity jurisdiction, which by that act was vested exclusively in the Supreme Court, was bestowed in part upon the Superior Court, the Court of Common Pleas, and Mayors’ and Recorders’ Courts of cities, and to the extent that each of those courts was given a general equity jurisdiction (Bowen v. Irish Presby. Cong., 6 Bosw.

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246 ; Bennett v. LeRoy, 5 Abb. 55 ; Forrest v. Forrest, 6 Duer, 102 , aff"d 25 N. Y. R. 501).

The judiciary article of the constitution which was adopted in 1870, continued the Superior Court, with all its then powers and jurisdiction, and such other powers and j urisdiction as might thereafter be conferred upon it by the legislature.

Under that provision of the constitution, the Superior Court was removed from the interference of the legislat ure, except to increase or add to its jurisdiction and powers. None which it possessed at the adoption of the article can now be taken away or diminished.

The 33d section of the Code of Procedure does not, in terms, confer upon this court a general equity jurisdiction. It gives it such jurisdiction, in certain specified cases, which theretofore were of exclusively equitable cognizance, such as actions for the partition of lands, and the foreclosure of mortgages, and then, generally, “to all other actions ” where the defendants reside, or were served within the city of New York.

Thus it would seem that it must have been the intention of the legislature to make the jurisdiction of the Superior Court, as respects the cause of action, equal and co-extensive with the jurisdiction of the Supreme Court, the only apparent qualification being in the jurisdiction over the person of the defendant. So that, if the defendant resides, or can be served with process, within the city of New York, the Superior Court may claim jurisdiction over any or every action of which any other court has cognizance, whether the cause of action be of an equitable or legal nature.

In speaking on this subject, in a case where the equity jurisdiction of the Superior Court was attacked (Forrest Forrest, 25 N. Y. Rep. 501 ), Mr. Justice Weight has given the history of legislation upon the subject of a somewhat analogous jurisdiction. He has shown that the legislature has complete power over the subject

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of divorces, and could give jurisdiction over them to any tribunal; and that, although it saw proper to confine the jurisdiction to the Court of Chancery, while that court was in existence, it was never deprived of the right to extend such jurisdiction to any other existing court, or to have created a court expressly for the purpose of such cases, similar to the ecclesiastical courts of England. The learned judge concluded, therefore, that it was competent for the legislature to vest such jurisdiction in the Superior Court; and that an action for divorce was embraced among the “other actions” to which the jurisdiction of that court was extended by the 33d section of the Code.

The theory of the decision in the Forrest case is, that by the Code, the distinction between actions at law and suits in equity being abolished, and one form of action provided, which is denominated a civil action, the only question which can, in any case, arise, is whether the proceeding is an “ action,” within the meaning of that word as used in the Code. If it is an action, then clearly the Superior Court is vested, by the 33d section, with jurisdiction over it.

In the case before us, the question might be regarded as sufficiently answered by a mere reference to the plaintiff’s proceeding to obtain the relief he seeks. There is a summons in the usual form, and a complaint, stating a cause of action within the provision of the Revised Statutes relating to proceedings against corporations in equity, and a demand for the appropriate relief. It has, therefore, all the characteristics and elements of an action, in the form prescribed by the Code.

The proceeding for the sequestration of the property of an insolvent corporation, was required by the statute to be instituted by “petition’’’ to the chancellor, with a further provision for a final decree. The form of the proceeding, therefore, as well as the peculiar jurisdic

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tion over the subject-matter, was fixed and created by the legislature ; and, being the mere creature of the statute, could be changed, modified, or enlarged by the power creating it. Although the “ second ” part of the Code, until otherwise provided, is not to affect proceedings against corporations, as provided in the title of the Revised Statutes before referred to (Code, § 471), yet, when in consequence of such proceedings, a civil action shall be brought, such action shall be conducted in conformity to such part.

The plaintiff has, therefore, brought an action in the . manner and form prescribed by the second part of the Code.

It cannot be supposed, I think, that the legislature intended to do more or otherwise than merely to preserve certain peculiar remedies which had been provided by statute. Thus leaving the remedies intact, but requiring that in pursuing them, if it was necessary to bring an action, to conform the action to the new Code of Procedure. Among the remedies thus qualifiedly excepted from the operation of the second part of the Code, is the remedy a creditor of an insolvent corporation has against the corporation, to sequestrate its property, and annul its corporate powers.

It is only by statute that an inquisitorial power is given to any court over corporate bodies.

The Court of Chancery had no jurisdiction over such bodies, until it was given by the legislature (Atty.-Gen. v. Utica Ins. Co., 2 J. Ch. R. 371; Varplanck v. Mer. Ins. Co., 1 Edw. 811 ). Hence, as was said in the Forrest case, it was and is competent for the legislature to give the jurisdiction over such bodies to any court or courts, and to prescribe the form of procedure to secure the remedies given by the statute.

The word “ petition” only is used in the 36th section, but the chancellor gives to it its broad signification, namely, a prayer to the court, saying, that every bill

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was a petition for relief. He therefore, in two cases, sustained a bill (Judson v. Rossie, Galena Co., 9 Paige, 598 ; Morgan v. N. Y. & Albany R. R. .Co., 10 Id. 290).

If, therefore, the remedy provided by the statute, could have been enforced by bill in equity, before the Code', then it is clear that it can be now pursued by action; and that the latter is an entirely appropriate form of procedure.

I have not found it necessary to look to the third subdivision of the 33d section of the Code, to find a conferred jurisdiction in this court. That subdivision embraces, in terms, actions against corporations for the recovery of any debt or damages; and also “ upon any cause of action ” arising within the State, which would seem to be sufficiently comprehensive to include a creditor’s remedy under the provisions of the Revised Statutes.

But as I have not found it necessary to rely upon that subdivision, for the requisite jurisdiction in this court, over the subject of this action, and having found sufficient in the “> second” subdivision, as explained by the Forrest case, to sustain the action in this court, I am not embarrassed by the two decisions in this court adverse to the views I have expressed (Kattenstroth v. Astor Bank, 2 Duer, 632 ; Brahe v. The Pythagoras Ass., 4 Id. 658 .)

Those decisions, which were before the decision of the Forrest case, were put upon the ground that the third subdivision did not reach to inquisitorial actions or proceedings against corporations under the Revised Statutes. The court did not examine the second subdivision, but confined itself to a construction of the third subdivision only.

I am, therefore, of the opinion that the case before us is an action within the meaning of the Code, and as such this court has jurisdiction over it.

The order sustaining the demurrer should be reversed

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with costs, with leave to defendant to withdraw the demurrer and answer on payment of costs.