Case ID: abbn-cas_1/html/0292-01.html
Source: Caselaw Access Project
Author: {"author": "Monell, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

NATIONAL PARK BANK v. GUNST.
    N. Y. Superior Court; Chambers,
    
    
      May, 1876.
    Security eor Costs.—National Bank.
    A national bank, organized under the act of Congress, is a foreign corporation within the statute of security for costs.
    Motion to compel plaintiff to file security for costs.
    The National Park Bank of the city of New York, brought this action against Charles A. Gunst.
    
      Charles Edward Souther, for motion.
    I. Plaintiff is a foreign corporation, incorporated and existing by virtue of the National Banking Act, and not by or under any statute of this State (U. S. Rev. Stat. title 62, p. 998).
    II. A foreign corporation created by the laws of “ any other State or country,” can, upon giving security for costs, prosecute in the courts of this State, the same as corporations created under the laws of this State (2 N. Y. Rev. Stat. 477, Edm. Ed.), and the national banks are created by the laws of another “ State.”
    ' IIL A national bank is a foreign corporation within section227 of the Code, respecting the remedy of attachment against foreign corporations (Bowen v. First National Bank of Medina, 34 How. Pr. 409).
    IV. The reason of the last case cited, applies equally to the point presented by this motion. In section 227 of the Code, the language is “ corporation created by or under the laws of any other State, government, or country,” and such corporation is in Code, § 229, called foreign.
    V. Plaintiff was not created under the laws of this State, and hence, it cannot sue at aE in our courts, unless under the provisions, and upon the terms appEcable to corporations otherwise created, i. e., it must first file security.
    VI. A national bank is a foreign corporation under section 3 of 2 R. S. 458, relating to pleading and proof of incorporation .(Nat. Bank of Metropolis v. Orcutt, 48 Barb. 257; Merchants’ Nat. Bank v. Macnaughton). If the national bank were on the same foóting with domestic corporations, it would not be com- „ pelled, upon the trial under this section, to prove its existence, except against a plea of defendant, in abatement, or in bar, that it is not a corporation at all; and judgment upon the answer as frivolous, in the cases cited, would have passed as matter of course. That the contrary was adjudged can only be because within the article of the Revised Statutes under review, the bank is foreign, and not domestic. Its locality may be here; but whether foreign or domestic, depends upon the law of its creation, and not the place of its being. Many of the steamship lines, for instance, incorporated in Great Britain, are as much localized here, and have here property and interests as large as the national banks, yet no one disputes their “foreign” character, nor that in suing in our courts, they must first file security.
    VII. 2 R. S. 457, § 1, seems to require the filing of security as a condition precedent to the commencement of the action. The authorities, however, allow it to be' done subsequently, upon payment of costs (Bank of Michigan v. Jessup, 19 Wend. 10 ; 1 Wait Pr. 100).
    
      Peter B. Olney, opposed.
    
      
       In Merchants’ National Bank v. Macnaughton, here cited (IV. T. Supreme Court, First Department; Chambers, May, 1873), it was held, that—1. A defense consisting of a denial that plaintiffs were a corporation, cannot be deemed frivolous merely because another defense alleges that defendant had dealt with them. 3. A national bank is a foreign corporation.
      Motion for judgment on frivolous answer.
      In March, 1873, plaintiffs began an action for $1,500, money loaned to defendant, alleging their incorporation as a banking corporation under the laws of the United States, having its place of business in the city of ¡New York.
      Defendant, in his answer averred, 1st. That he had no knowledge or information sufficient to form a belief, as to whether or not the plaintiff was a banking corporation as alleged, and therefore denied the same. 3nd. Denied each and every allegation in the complaint contained, inconsistent with, or not expressly admitted by the following averments. Defendant then averred that at the request of one Conant, he made application to the plaintiff, to borrow $1,500, which plaintiff consented to do; thereupon Conant delivered to defendant three railroad bonds of the par value of $1,000 each, and that he thereupon delivered them to the plaintiff, and received from the plaintiff the sum of $1,500, which he immediately paid to said Conant; that when he learned that Conant had made default in the payment, he requested plaintiff to sell said hypothecated securities to repay itself said loan, but that plaintiff had not done so; that plaintiff should exhaust its remedy against said securities, before proceeding against the pledger thereof. 3rd. Averred no knowledge, &e., sufficient to form a belief as to whether Conant had paid the debt, and taken up the securities. 4th. That he had signed no memorandum or agreement in writing, sufficient in the law to make him liable for the debt, default or miscarriage of said Conant.
      
        
        John E. Burrill, for plaintiffs,—Moved for judgment on account of the frivolousness of the answer.
      
        Charles Edward Souther, opposed.
      Leonard, J.—The first answer cannot be called frivolous. On this motion the plaintiff cannot try the issue on the first answer (a denial of the existence of the corporation) by the allegations of another defense.
      The plaintiff must be held to be a foreign corporation. Bowen v. First Nat. Bank Medina, 34 How. Pr. 409.
      Motion denied, ten dollars costs to abide the event.
      No appeal was taken.
    
   Monell, Ch. J.

Decided in favor of the defendant, and an order was entered requiring the bank to file the requisite bond as security.

No appeal was taken.