Case ID: misc_17/html/0556-01.html
Source: Caselaw Access Project
Author: {"author": "I)alt, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James G. Timolat, Respondent, v. The S. J. Held Co., Appellant. The Oakland Chemical Co., Respondent, v. The S. J. Held Co., Appellant.
    (Supreme Court, Appellate Term,
    July, 1896.)
    Service — Corporations -j- Resignation of director..
    -Where the by-laws óf a corporation provide that, its directors shall serve until their successors are chosen, service upon a director who has resigned, but whose successor has not been chosen, is binding upon the corporation.
    Sarrio —• Appeal. '
    An order of the City Court granting or denying a motion to set aside . the service of a summons is a discretionary one, and is not appeal-able'to the'Appellate Term of the Supreme Court.
    Appeal by defendant in both actions from the affirmance, 'by the General Term of the City Court, of orders of the Special Term denying defendant’s motions' to vacate and set aside the service of the summons and complaint' upon S. J. Held, upon the ground that at the time of service he was not a director, nor an officer of the corporation defendant.
    Isaac Fromm o and H..B. Wisselman, for appellant.
    Walter B. Beach, for respondent.
   I)alt, P. J.

The summons and complaint were served on November 5, 1895, upon S. J. Held, as director, secretary and treasurer of the company, but defendant claims that he resigned those offices on October 15, 1895. The by-laws of the company provide that the board of directors shall be three, who shall be elected annually on July 16, and shall serve for one year “ and until such time as successors are chosen,” and. that any vacancy in the board, or among the officers of the company, caused by death, resignation, or otherwise,' shall be filled by the remaining directors for the balance of the year and until the next annual election.

It is undisputed that no successor was chosen for S. J. Held, as director, secretary or treasurer, when his resignation was received, and he was, therefore, under the by-laws, serving as such director at the time of the receipt of the summons and complaint by him and service of the papers upon him was regular. There is no question here of the personal liability of the resigning director to the creditors of the company, but only a question between such creditors and the company, under its own by-laws, and for its own neglect to terminate its official relations with the director by electing his successor. When, by its by-law, it declares that he shall serve until his successor is chosen, it constitutes him its officer until that event with the same effect, so far as the corporation is concerned, as if he were serving in the term for which he was elected and had not resigned. It was in the power of the company to terminate his agency at any time by electing a successor, and if it chose rather to continue such agency he must be treated, in actions against the company, as its duly constituted officer.'

A by-law of a corporation has all the force óf a statute, and is as binding upon the company and its members as any public law of the state. Thompson on Corp. 939; Kent v. Quicksilver M. Co., 78 N. Y. 159-79; Brick Pres. Ch. v. Mayor, 5 Cow. 538. Where a public statute declared that certain town officers should hold their offices for one year and until their successors were elected and qualified, it was field that process was regularly served upon such officers who had previously resigned and. for whom no successors had been chosen. Badger v. U. S., 93 U. S. 599. Service upon S. J. Held was, therefore, regular. He was a director by virtue of the law. of the company notwithstanding his resignation, as his successor had not been chosen, and service upon a director was service upon the corporation. Code, § 431.

The objection of respondent that the order is not appealable to the Appellate Term is well taken. Had judgment been entered upon such service and a' motion made thereafter to vacate it for want of service upon the corporation, we should not have reviewed the determination of the City Court upon such motion; for it is in the discretion of the court to vacate, upon motion,, a judgment, regularly entered. Jackson v. Brunor, 17 Misc. Rep. 339.

It rests equally within the discretion of the trial court to entertain a motion to vacate the service, of summons. • , If the service. • were not made upon an officer of the corporation as directed by the Code, the judgment would not bind the corporation, and whenever its enforcement were attempted the want of jurisdiction-could ■ be shown. In this case the service was regular, but if it were not, the order would not be appealable. The case of Wilson v. Brentwood Hotel Co., 16 Misc. Rep. 48, in which we reviewed a judgment entered upon alleged irregular service, was an appeal from a -District Court, and with such judgments we have the power of the former General Terms. In appeals from the City Court our jurisdiction is similar to that of the Court of Appeals, and we cannot review the discretion exercised in making the order appealed from.

Appeal dismissed, with costs and disbursements.

MoAdam and Bischoff, JJ., concur.

Appeal dismissed , with, costs and disbursements.