Case ID: ny-st-rep_46/html/0549-01.html
Source: Caselaw Access Project
Author: {"author": "Osborne, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Grafton, App’lt, v. The Union Ferry Co. of Brooklyn, Resp’t.
    
    
      (City Court of Brooklyn, General Term,
    
    
      Filed June 27, 1892.)
    
    Abatement and bevtvor—Corporations—Torts.
    Pending action against a corporation for injuries caused by the carelessness and negligence of its servants, the charter of the corporation expired by limitation. Held, that the action could not be revived against the directors as trustees; that the plaintiff could not be considered a creditor within the meaning of the statute.
    Appeal from order denying motion to continue the action against the directors of the defendant in office at the time of its dissolution.
    
      Backus & Manne, for app’lt; F. A. Ward, for resp’t.
    
      
       Affirming 40 St. Rep., 137.
    
   Osborne, J.

In March, 1890, plaintiff brought this action to recover damages for injures alleged to have been sustained by him through the negligence of defendant’s servants while a pas-" senger on one of defendant’s ferries. The answer of the defendant denied the allegations of the complaint, alleged that plaintiff was a trespasser, and that any injuries he sustained were caused by his own negligence.

The defendant was originally organized on November 9, 1854, under the provisions of chap. 135 of the Laws of 1853, for a period of eighteen years. Chapter 937 of the Laws of 1867 provided that any corporation theretofore formed might extend its term of existence for a period not exceeding- the term for which such corporation was organized in the first instance. Under the provisions of this act the defendant extended its term of existence for a further period of eighteen years, which period expired on November 9, 1890, and thereupon the charter of the defendant expired and the company became extinct.

In February, 1891, plaintiff made a motion to continue this action against the persons who were directors of the defendant at the time its charter expired, in their capacity as trustees of the stockholders and creditors of the defendants. This motion was denied, and plaintiff appeals from the order denying said motion.

Title 3, chap. 18, part 1 of the Revised Statutes (p. 600, m. p.) provides inter alla as follows:

See. 9. Upon the dissolution of any corporation created, or to be created, and unless other persons shall be appointed by the legislature or by some court of competent authority, the directors or managers of the affairs of such corporation at the time of its dissolution, by whatever name they may be known in law, shall be the trustees of the creditors and stockholders of the corporation dissolved, and shall have full power to settle the affairs of the corporation, collect and pay the outstanding debts, and divide among the stockholders the moneys and other property that shall remain after the payment of debts and necessary expenses.
Sec. 10. The persons so constituted trustees shall have authority to sue for and recover the debts and property of the dissolved corporation, by the name of the trustees of such corporation, describing it by its corporate name, and shall be jointly and severally responsible to the creditors and stockholders of such corporation to the extent of its property and effects that shall come into their hands.”

These provisions were adopted from the revised laws.

By § 4 of chap. 295, Laws of 1832, it was also enacted that *“The court in which any suit or proceeding against a corporation which shall have been dissolved by the decree of the court of chancery or by the expiration of its charter, or otherwise, shall be pending at the time of such dissolution, shall have power, on the application of either party thereto, to make an order for the continuance of such suit or proceeding, and the same may thereafter be continued until final judgment or decree shall be had thereon, which shall have the like effect upon the rights of the parties as if such corporation had not been dissolved.”

Plaintiff’s application in this case would seem to be based upon the course of proceeding prescribed by this statute, and were it still in force, it would undoubtedly afford ample authority for the granting of plaintiff’s motion; but, unfortunately for his contention, this act was repealed by chap. 245 of Laws of 1880, and no substitute for it has ever been enacted.

At common law, originally all actions ex delicto abated on the death of the party by whom or to whom the wrong was done. The Revised Statutes, 3 R. S., 7th Ed., 2394 and 2395, §§ 1 and 2, provided for the continuance of certain actions for wrongs against the executors or administrators of a deceased wrong-doer; but actions on the case for injuries to the person of the plaintiff, with certain other enumerated causes of action, were expressly excepted therefrom.

If defendant was a natural person there could be no question but that the maxim of actio personalis moritur cum persona would apply, and that this action would abate. The learned counsel for the appellant, however, contends that, as the plaintiff’s claim has always been against the property of the defendant, and that as that property still exists, he should be entitled to prosecute any remedy that he may have against the property. This proposition, we think, cannot be sustained. On the death of an individual tort feasor, his property still exists in the hands of his executors or administrators, and it might with equal force be urged that the property of the deceased should be answerable for a claim ex delicto,, but such is not the law. There is, in our opinion, no distinction between the death of an individual and the dissolution of a corporation pendente lite. Sturges v. Vanderbilt, 73 N. Y., 384, 390. The same rules of law apply except so far as specially altered by statute to the motion to continue an action against the legal representatives of one as the other. Bank of Selma v. Colby, 21 Wall, 609; Greeley v. Smith, 3 Story, 658; May v. State Bank of N. C., 2 Robinson, 56. But even if this were not so, it is a well-settled rule of the common law that the dissolution of a corporation puts an end to an action pending against it McCulloch v. Norwood, 58 N. Y., 562.

Plaintiff being therefore remediless at common law, the only question left for us to determine is whether there is any statute which has so far altered or modified the common law as to entitle him to the relief that he seeks. The above quoted sections 9 and 10 are the only provisions of the Revised Statutes relating to the question involved. They constitute the directors of the defendant, in office at the time of its dissolution, trustees of the creditors and stockholders of the defendant, with power to settle the affairs of the defendant, pay outstanding debts and divide the residuum among the stockholders after the payment of debts and necessary expenses. Power is also given to sue for and recover the debts and property of the defendant.

The duties devolving on the trustees are thus fully set forth, and to them can be added no other, or different or additional duties than those prescribed by the statute; they are made trustees of but two classes of persons, to whom alone their allegiance is due, and to whom they are accountable; to wit, creditors and stockholders. Plaintiff not claiming to be a stockholder, can he obtain the benefit of the statute on the ground that he is a creditor of the defendant? We think not; indeed the learned counsel for the appellant very candidly concedes in his brief that a party who has an action pending for injuries to the person cannot be considered a creditor in the legal definition of that word. The cases are numerous, holding that liability for tort is not a debt Heacock v. Sherman, 14 Wend., 58; Crouch v. Cridley, 6 Hill, 250; Kellogg v. Schuyler, 2 Den., 73; Esmond v. Bullard, 16 Hun, 65.

It is however sought to bring the plaintiff within the class of persons who might be designated as creditors on the theory that defendant contracted with him as an alleged passenger to carry him safely, and that his present claim is for damages springing from a breach of such contract. We think the answer to that suggestion is that in the complaint herein no contract .is alleged, but damages are claimed solely for the carelessness and negligence of defendant’s servants by closing a gate upon him, and the action is grounded in tort. Cregin v. Brooklyn C. T. R. R. Co., 75 N. Y., 193.

It seems to us, therefore, that the present application of the plaintiff cannot be sustained, as it is without any statutory provision to support it, and the common law is opposed to it

In arriving at this conclusion, we have not been unmindful of the fact that a similar application in another action pending in the supreme court has been granted, after careful consideration, by one of its most learned and painstaking judges, and that his decision has been affirmed by the general term of the second department, Mr. Justice Dykman dissenting. Hepworth v. Union Ferry Co., 41 St. Rep., 783. We have carefully gone over the opinion of the special term judge, and the prevailing opinion of the general term, and considered the reasons advanced by them for reaching the conclusions at which they have arrived, but we find ourselves compelled to differ from them.

The order appealed from should be affirméd, with costs.

Yan Wyck, J., concurs.