Case ID: ny-st-rep_62/html/0697-01.html
Source: Caselaw Access Project
Author: {"author": "Bradley, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

David Drew as Assignee, etc., App’lt, v. Fred. C. Keufer et al., Impleaded, etc., Resp’ts.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed October 17, 1894.)
    
    1. Corporations—Directors—Liability.
    Directors, unless they specially promise to pay, are not personally liable for services rendered, at their request, for the corporation.
    2. Pleading—Amendment—Answer.
    In an action on a joint contract for services, an amendment of the answer of some of the defendants, who denied the performance of the services, so as deny a personal promise, is not a substantial change of the defense, where the same was already alleged by the other defendants.
    3. Evidence—Opinion—Conclusion.
    In an action to charge directors personally for services rendered for the benefit of a corporation, a question as to whose credit plaintiff relied upon calls for the conclusion of the witness.
    
      Appeal from a judgment dismissing the complaint.
    
      Walter S. Drew and James 0. ■ Sebring, for app’lt; Geo. W. Hall, for resp’ts Keufer & Karle ; Briggs & Sunderlin, for resp’t Hoover.
   Bradley, J.

The facts found by the referee are to the effect that, at a meeting of a majority of the board of directors, proceedings were directed and taken, pursuant to the statute, for the voluntary dissolution of the corporation, and Mr. Sebring was employed as attorney to conduct them, and that he prepared their petition, which was presented, and the requisite proceedings were had to accomplish the purpose. Code Civ. Pro. §§ 2419-2429. This proceeding was set in motion by the action of the defendants in their relation as directors of the corporation, and as such they made the petition and caused the proceedings to be had. They were therefore not personally liable to the attorney, unless they, by some special promise, undertook to pay him for his services. The referee found thát they assumed no such personal relation to him by any individual promise to compensate him in the premises, and such finding is supported by the evidence. His conclusion that there was no personal liability of the defendants necessarily followed. The proceedings were those of the corporation by its constituted agencies. Skinner v. Smith, 56 Hun, 437; 31 St. Rep. 448. The life of the corporation continued until the final order .was made dissolving it (Code Civ. Pro. § 2429; Iron Works v. Smith, 4 Duer, 362); and then the receiver appointed was, in practical effect, its representative for certain purposes.

The defendants Keufer and Karle, by their answer, put in issue the allegations of the complaint other than that the defendants were directors of the corporation. The defendant Hoover, by his answer, denied any knowledge or information sufficient to form, a belief that Sebring performed all the services mentioned in the complaint, and alleged that his services were of little or no value to the corporation. Upon the trial a motion in behalf of the defendant Hoover, made to amend his answer by alleging denial" of the employment of Sebring by the defendants as their attorney, was granted. This was opposed, and exception taken by the plaintiff’s counsel; and it is insisted that it was not within the power of the referee to grant it. Although his power to allow amendments is limited by the statute (Code Civ. Pro. §§ 723, 1018), we think the exception was not well taken. Treating the facts alleged in the complaint as sufficient to charge the defendants personally, their alleged contract, according to the rule at common law, must be treated as the joint contract of all the defendants, as nothing appeal's in the allegations to the contrary; and although the rule has been so modified by statute as not to •render the misjoinder fatal when the joint liability of all the defendants is not established and the several liability of some of them is made to appear by evidence, the apparent liability alleged is that of all the defendants upon their joint promise ; and nothing appeared in the evidence to distinguish the relation of the defendant Hoover to the alleged promise from that of the other defendants to it. The promise was alleged to have been made by the defendants jointly, and no attempt by evidence was made to show that it was otherwise. In that view the amendment of his answer made by defendant Hoover in denying that the defendants promised as alleged, was not a substantial change of the defense, as the same had already been alleged by other defendants. Beyond that the. amendment was immaterial.

The answer of witness Sebring to the question on whose credit he relied in performing the services was properly excluded upon the defendant’s objection. It called for the conclusion of the witness, rather than the facts upon which its determination depended; and it was quite immatarial whose credit he relied upon, unless his contract with the defendants or their promise permitted him to rely on their credit That was a question for the referee to determine. Merritt v. Briggs, 57 N. Y. 651; Pope v. McGill, 58 Hun, 294; 34 St. Rep. 281.

There was no error in the rulings on the trial or in the determination of the'merits.

The judgment should be affirmed.

All concur.