Case Name: Samuel H. Terry, App'lt, v. Leopold Rothschild, Resp't
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1895-01-18
Citations: 65 N.Y. St. Rep. 14
Docket Number: 
Parties: Samuel H. Terry, App’lt, v. Leopold Rothschild, Resp’t.
Judges: 
Reporter: New York State Reporter
Volume: 65
Pages: 14–16

Head Matter:
Samuel H. Terry, App’lt, v. Leopold Rothschild, Resp’t.
(Supreme Court, General Term, First Department,
Filed January 18, 1895.)
Corporation—Stockholder—Liability.
The issuance and return, unsatisfied, of an execution, on some other judgment than the one finally recovered against the corporation, does not satisfy the provisions of § 24, chap. 40 of 1848.
Appeal from a judgment dismissing the complaint.
In May, 1887, the I. Herman Manufacturing Company was incorporated, under chap. 40, Laws 1848 (the Manufacturing Act), and the acts amendatory thereof, with a share capital of $10,000, divided into 10,000 shares of. $1 each. The corporation was organized “ to manufacture Jersey, hand-knit, worsted goods, and anything connected therewith,” and was to exist during 50 years. The number of its trustees was fixed at three. Solomon Herman, Leopold Rothschild, and Isidor Herman were appointed trustees for the first year. The principal office or place of business of the corporation was located in the city and county of New York. Rothschild remained a trustee and the president of the corporation until 1890. January 14, 1889, the plaintiff recovered ajudg ment by default against the corporation, in the city court of New York, for $1,829.52 damages and $18.55 costs (total $1,848.07), for six items of indebtedness which the corporation incurred to the plaintiff between November 8, 1888, and December 20, 1888. On the same day (January 14, 1889), tké plaintiff recovered a second judgment by default against the corporation, in the city court of New York, for $1,926.32 damages and $18.75 costs (total, $1,945.07), for four items of indebtedness which the corporation incurred to the plaintiff between November 23, 1888, and December 11, 1888. On the 14th of January, 1889, executions were issued on the judgments to the sheriff of the city and county of New York, who returned them, March 8, 1889, wholly unsatisfied. On March 9, 1889, this action was begun to charge the defendant, as a stockholder, pursuant to § 10 of said act, for the amounts of those judgments. May 10, 1889, the defendant answered herein. September 10, 1889, upon the motion of the defendant, the judgments were vacated, and it was permitted to defend the actions; but on appeal to the general term the order was, November 6, 1889, modified so as to permit the defendant to defend the actions, and the judgments to stand as security. The actions were subsequently tried on their merits, the plaintiff recovering, in the one represented by the judgment first mentioned, $930.35 damages and $262.46 costs (total, $1,192.81), and, in the action represented by the second judgment, $1,610.06 damages and $292.39 costs (total, $1,902.45). Judgments on these recoveries were entered December 13, 1889. No executions have been issued on the judgments last rendered, which represent the claims of the plaintiff against the corporation and its stockholders. The number of shares of stock owned by the defendant was not shown, bnt it was shown that he had paid $3,000 into the corporation for shares, and that only $4,000 of the capital (fixed at $10,-000) had been paid in by the shareholders. It was also shown that no certificate of the payment of the capital stock had been' made and recorded, as required by the eleventh section of the act, and that at some time a receiver had been appointed for the corporation ; but for what cause, when he was appointed, or whether the corporation was in the hands of a receiver at the time of the trial was not shown.
John R. Abney, for app’lts; Mark M. Schlesinger, for resp’t.

Opinion:
Per Curiam.
The judgments recovered January 14, 1889, which this action was brought to enforce against the defendant, as a stockholder, were not in existence at the time of the trial of this action (December 13, 1892), but they had been superseded by the two judgments entered December 13, 1889, after a trial of the actions on the merits. By the trial on the merits, the damages recovered by the first judgment, of January 14, 1889, were diminished by $899.17, and the damages recovered by the second judgment, of January 14, 1889, were diminished by $23.87. The plaintiff did not have the first two judgments modified so as to correspond with the recoveries, as he might have done; but, instead, lie elected to enter new judgments, which became the meas ure of the liability of the corporation to him. The corporation's liability by the judgments of December 13, 1889, arose several months after this action was begun, and no executions have been issued on them, nor was it shown that they had not been paid. Section 24 of the act provides that a stockholder shall not be held personally liable for the debt of the corporation until a judgment has been recovered thereon, and an execution shall have been returned unsatisfied in whole or in part. The issuance and return, unsatisfied, of an execution on some other judgment, does not satisfy the statute. It must be on the judgment which is the foundation of the plaintiff's suit. The judgment should be affirmed, with costs.
AILconcur.