The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-17
A BRACkETT BILL VETOED.
It Provides That In stockholders' Suits the
Corporation Shall Pay the Costs.

ALBANY, April 18.-Gov. Higgins has
vetoed Senator Brackets bill, which pro-
vides that a stockholder bringing an action
to compel a corporation officer to restore
moneys OF the corporation wasted may
be allowed all his expenses Of the suit In
case it is successful.
After the veto message had been read
In the Senate, Senator Bracket said he
purposed later to ask the Senate to pass
the bill over the Governors veto, as he
believed the Governor had been lily ad-
vised regarding the operation Of the pro-
posed law. Senator Bracket wanted the
bill laid on the table for the present, but,
as Senator Grady suggested. 1t was re-
ferred to the Judiciary Committee, with a
view OF determining whether a general
bill accomplishing the purpose Of the
Brackett bill should not be drafted in ac-
cordance with the suggestion Of the Gov
ernor in his veto message.
In his message vetoing the bill Gov.
Higgins says;
This bill provides that In a class OF actions
commonly known az stockholders actions,
the expenses incurred by the plaintiff in the
prosecution OF such action and his costs shall
be fixed by the court. " and shall be paid by
the corporation defendant in whose right
and for whose benefit the action is brought.
Az NoVo wv iO"CNSit Niu
actions. brought In the right and for the bene-
fit of municipalities.
The section of the code OF civil procedure
now applicable TO such cases provides that
the court may. upon the rendering OF a final
judgment. In its discretion award costs dn-
GLIDING statutory disbursements to any party,
In such sum-. not exceeding the total amount
authorized by statute as to the court shall
seem just. In any difficult or extraordinary
case where a defence has been interposed.
the court may grant an additional allowance
to the plaintif not exceeding 5 per centum
upon the amount recovered or claimed or the
value of the subject matter involved. but not
exceeding in the aggregate 81 900.
1t is now proposed to allow the plaintiff
TO recover. in addition to costs as above
defined, his entire expenses in actions in
Guided within the terms of this bill, without
limitation as 10 the ratio Of such expenses
to the recovery and without limitation as
to the amount except that sum allowed shall
be what in the discretion of the court is just
and reasonable,
Costs are compensation for the expense
incurred by a party in the prosecution Of
an action. The prevailing party is not al
lowed to recover from the adverse party
the actual expense he has been put to in
carrying on his suit. but is permitted to re-
cover only certain sums fixed by the code.
In many cases the prevailing party is put to
q greater expense than he is permitted to
recover from the defeated party. and hard
ship results. for It is a matter OF common
knowledge that the expenses OF a successful
litig ton may consume his entire recovery.
Unless the entire policy OF our law as to
the allowance OF costs is changed and the
whole subject Of allowances is TO be left to
the discretion OF the court, the Legislature
should hesitate before making exceptions.
and in all cases should limit the amount to
be allowed to a certain percentage Of the re-
covery and within a fixed maximum sum.
The present bill creates an arbitrary eX-
ception to the general rule. not even includ-
ing all Of a class. and it would permit the
attorney for the successful plaintiT to divert
the entire recovery, and moro. from the cor
poration TO himself. provided always his
charges we're just and reasonable in the judg-
ment of the court, for this bill does not even
provide that the expenses thus allowed shall
be paid out of the sum recovered from the
benefit of the corporation.