Case ID: ad_17/html/0432-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Ingraham, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Atwood Porter, Respondent, v. James H. English and William H. English, Composing the Firm or Copartnership of James H. English & Son, Appellants, Impleaded with Others.
    
      Equity — agreement between the maker and indorser of a note that the indorser should be made an officer of a corporation — his removal from office will not sus- - tain an injunction to prevent the enforcement of á note.
    
    An agreement made between, the maker and an indorser of a promissory note, by which the indorser was to be made treasurer of a corporation of which the parties were trustees, and the fact of the subsequent removal of the indorser from that position, afford ho ground for an action and. injunction to prevent the enforcement of such note by a holder thereof, not a,party to the agreement, although a.trustee of the corporation and (having knowledge of the agreement) voting for such removal. .
    Such facts, if they constitute a defense to the note, should he set up in thé suit-brought to enforce the note.
    Appeal by the. defendants, James H- English and William H. English, composing the firm or copartnership of James H. English & Son, .from an order of- the. Supreme Court, made at the New York Special Term and entered .in. the office, of the clerk of the county of New York-on .the 8th day of. February,- 1897j continuing an injunction fpmdente Vite. ''
    
      Eleh J. ludvigh, for the appellants.
    
      William V. Rowe and Walter T. Rosen, for-the-respondent.
   Ingraham, J.:

The order appealed from enjoins the defendants English from in any manner enforcing, or attempting to enforce, any liability of the plaintiff as indorser upon a promissory note referred to in the complaint and now held by the said defendants English, and from selling or transferring, or attempting to sell or transfer, twenty shares of the capital stock of the Baldwin & Gleason Company, Limited, contributed by the plaintiff under and pursuant to the agreements referred to in the complaint, and deposited with the defendants English as collateral security for the payment of the said note. It is alleged that the firm of James H. English & Son had duly discounted this, note and held the stock as collateral security for its payment; that this plaintiff is an indorser upon the note, and that said indorsement was made under a contract between himself, his co-indorser and the maker. It is not disputed that the note is a valid obligation of both the maker and this plaintiff, yet the court has enjoined the defendants English from enforcing this liability because of an allegation that the maker of the note and the plaintiff, and a co-indorser of the plaintiff, had agreed as between themselves that this plaintiff was to be treasurer of a certain corporation of which the parties were trustees, and that subsequently the trustees or directors of the corporation would not recognize this agreement, and they removed the plaintiff as such treasurer. It is not' alleged in the complaint that either of the defendants English was a party to that agreement, was in any way bound by it, or that the corporation was itself a party to the agreement. There' was no contract of the corporation to retain the plaintiff in its employ for any particular time, and if the maker of the note and the plaintiff’s co-indorser have violated any agreement that they had with the plaintiff it would seem that the plaintiff’s remedy worrld be an action, against the persons who had violated this agreement, and not to prevent this firm, which had in good faith advanced its money upon the note indorsed by the plaintiff, from recovering on the note. There is absolutely nothing in the papers presented to justify the court in. taking away from the holders of this note the right to enforce it because other people have failed to keep their contracts. It is very difficult to see upon what ground there could be any liability of the defendants English. They are not parties to tlie--contract.' The. corporation of which one of them was .a director was not a party to the contract, and neither they nor the corporation have violated any duty they owed to the plaintiff. It is true the complaint alleges that these defendants English had knowledge of "the agreement between these three parties who were officers of this : corporation, and that notwithstanding that-fact the defendants, in violation of the said agreements, "oh -or about the 9th day ' of November, 1896, having at that time full control of. the board of directors of the corporation, procured the removal, . without cause, of the plaintiff as treasurer apd employee of said corporation. But if they did, and if they knew that by so doing these * other two parties" would become liable "to the plaintiff for any damages he had sustained in consequence of what, was a violation' of an agreement between them, upon what .principle can the'defendants, be punished % They violated no agreement, either of themselves or of the company of which they were trustees, and it is quite a novel application of equitable methods to punish them by preventing them from collecting their money from the plaintiff because other parties have voted at a meeting of .trustees of a corporation to do-an act' which such other parties had agreed should not be done. In addition to this, all of the facts here alleged could be set up in answer as a defense in any action upon 'the promissory note,, and the question should be settled there rather than in an action in equity.

There is no allegation that the defendants English are not amply able to respond for any damage that" the plaintiff has sustained in consequence of any violation of his rights.

The order appealed from was without justification, and must be reversed, with ten dollars costs and disbursements,, and the motion denied, with ten dollars costs. ■ - '

Patterson, Williams, O’Brien, and Parker,. JJ., concurred.

Order reversed, -with ten dollars costs and disbursements, and" motion denied, with ten dollars costs. • . "