Case Name: BLACK v. VANDERBILT et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1902-03-07
Citations: 74 N.Y.S. 1095
Docket Number: 
Parties: BLACK v. VANDERBILT et al.
Judges: 
Reporter: West's New York Supplement
Volume: 74
Pages: 1095–1101

Head Matter:
BLACK v. VANDERBILT et al.
(Supreme Court, Appellate Division, First Department.
March 7, 1902.)
Newspaper—Booming Corporate Stock—Contract—Complaint for Equitable Relief—Sustaining as for Legal Redress.
A complaint, in substance, alleged the failure of defendants to compensate plaintiff as agreed for services performed in booming, in a newspaper of which he was editor and manager, the price of a certain railroad stock which defendants and others were manipulating on the stock exchange. It alleged that, as compensation, a certain number of shares in possession of defendants were set aside as plaintiff’s property, and for his benefit, from which, if a profit resulted from the manipulation, defendants were to account to him, and if otherwise, to bear the loss, and that large profits resulted, for which defendants had not accounted. It alleged conduct and acts of defendants as tending to result in plaintiff’s loss of the stock and profits held by them in violation of their agreement, and then asked for an accounting, injunction, and the appointment of a receiver, and such other relief as might be just and equitable. HeW, that the complaint was framed solely for equitable relief, and could not be sustained, as against a demurrer for want of equity, as a complaint for legal redress.
Laughlin, J., dissenting.
Appeal from special term, New York county.
Action by E. Martin Black against William K. Vanderbilt and others. A demurrer to the amended complaint was sustained, and plaintiff appeals.
Affirmed.
See 74 N. Y. Supp. 629.
The complaint herein is as follows:
“(1) That the plaintiff now is, and at all times since the year 1887 has been, the editor and manager of a newspaper known as ‘The Wall Street Daily News.’ (2) That in or about the years 1897-1898 the said defendants entered into an agreement with said plaintiff, which agreement was in part in writing" and in part oral, wherein and whereby they, the said defendants, for and in consideration of the services of the plaintiff as hereinafter mentioned, agré'ed to and did set apart, as the property of and for the benefit of said plaintiff, five hundred shares of the common capital stock of the Pittsburgh, Cincinnati, Chicago & St. Louis Railroad Company, of the par value of §100 per share, which said five hundred shares they, the said defendants, placed with other like shares of the capital stock of the said railroad company owned by them and others, and controlled by them, for the purpose of forming a pool or combination of said stock, and dealing in or manipulating the price of the same on the New York Stock Exchange and elsewhere, with the view of enhancing the value of all such shares; that it was in and by said agreement further provided that, in case a loss should be incurred in such dealings or manipulation, it should, so far as the said plaintiff was concerned, be borne by the defendants, while, if a profit resulted therefrom, the said defendants were, upon demand of said plaintiff, to account for and pay over to said plaintiff the profit that would be and become due to him on account of the shares so set apart for him up to and at the time such demand was made. (3) That said agreement further provided that in consideration of the terms thereof to be performed as aforesaid by said defendants, as such trustees, said plaintiff was to perform certain work and services, on request and on behalf of said defendants, in and about the enhancement of the value of said stock through the medium of the said newspaper; that said plaintiff fully performed all the matters and things by him to be performed under said agreement. (4) That after the formation by the defendants, as aforesaid, of the said pool or combination, the market price of the shares of the said Pittsburgh, Cincinnati, Chicago & St. Louis Railroad Company, by reason of the services of the plaintiff as aforesaid, and the dealings and manipulation as aforesaid, rose rapidly in value, and large profits accrued in favor of the defendants and said plaintiff, and -said plaintiff thereafter demanded of the defendants that they account for and pay over to him his share of such profits, as represented by the 500 shares aforesaid; that said trust Is still open, and the accounts of said trustees have not been settled or adjusted, or the 1 amount due said plaintiff under said trust agreement ascertained. (5) On information and belief, that the said defendants William K. Vanderbilt and Edward V. W. Eossiter allowed, and still allow, said defendant Francis D. Carley to manage, control, and manipulate said stock, including said five hundred shares held as aforesaid for said plaintiff; that said defendant Francis D. Oarley is insolvent and unable to pay his debts, and has unpaid, outstanding judgments against him; that said defendants during the pendency of this action are doing and procuring to be done various acts in violation of the said plaintiff’s rights respecting said five hundred shares of stock, and the profits already or to be derived from the sale thereof, which tend to render any judgment which may be recovered herein ineffectual; that said plaintiff has a substantial interest in said shares of stock, and the profits already or to be derived from the sale thereof, now in the possession or under the control of said defendants as such trustees, and there is danger that such stock or the profits already, or to be derived from the sale thereof, will be removed by said defendants be)rond the jurisdiction of said court, or will be lost, materially injured, and destroyed.
“Wherefore said plaintiff demands judgment against said defendants: (1) That an accounting be had of and concerning the matters and things aforesaid, and that said defendants pay over to said plaintiff any and all sums of money or profits found to be due him upon such accounting. (2) That said defendants, and each and every of them, and the agents, brokers, and employés of each and every of them, be restrained by injunction, during the pendency of this action, from interfering with or disposing of said five hundred shares of stock held as aforesaid for said plaintiff, if still in their possession or under their control, and from interfering with or disposing of any and ail sums of money or profits due said plaintiff under the terms of said agreement. (3) That a receiver be appointed of the said five hundred shares of said stock held as aforesaid for said plaintiff, or, if the said shares have been sold, then and in that case, of the profits derived by said defendants, as such trustees, from the sale or transfer thereof. (4) That said plaintiff have such other and further relief in the premises as may be just and equitable, together with the costs and disbursements of this action.”
The defendants demurred to the complaint on the ground that it docs not state facts sufficient to constitute a cause of action; one of the reasons assigned being that the plaintiff’s remedy, if any, is legal, and not equitable, as demanded. The court sustained the demurrer, and from the interlocutory judgment thus entered the plaintiff appeals.
Argued before VAN BRUNT, P. J., and McEAUGHLIN, PATTERSON, O’BRIEN, and EAUGHLIN, JJ.
Robert L. Stanton, for appellant.
Henry B. Anderson, for respondents.

Opinion:
O'BRIEN, J.
Reading the allegations of the complaint in the light of the prayer for relief, there can be no doubt that what the plaintiff sought was equitable relief in an equitable action. Were there any such doubt, it would be dispelled by the statement in the brief of the plaintiff on this appeal that "the amended complaint states a good cause of action for equitable relief, and, upon the allegations contained in the amended complaint, the plaintiff is entitled to maintain an action for an accounting." It is true that in a subsequent part of the brief is the contention that if, upon the facts stated, the plaintiff was entitled to any redress, legal or equitable, it was error for the court to sustain the demurrer. This latter proposition for which the appellant contends has been applied in cases where an answer has been interposed, and thereafter the sufficiency of the complaint was questioned. We can find, however, no authority for the proposition that where a suit is brought in equity for equitable relief, and the defendant demurs, it then becomes the duty of the court, where the facts would not warrant equitable redress, to hold that the demurrer is bad because it might be concluded, upon some construction of the allegations of the complaint, that the plaintiff has stated certain facts which, disregarding all the others, might convert the suit into an action at law. It is true that a party is not to be turned out of court merely because he has failed to demand the precise remedy to which he is entitled, and that he may state in his complaint the facts upon which he relies in such a manner as to entitle him either to legal or equitable relief. But here no legal redress is demanded, and it conclusively appears that the complaint was framed for equitable relief alone.
In Swart v. Boughton, 35 Hun, 287, it was said:
"Where all the allegations of the complaint are made for the purpose ot procuring equitable relief, and where equitable relief alone is asked for, the complaint cannot.be sustained for legal redress where no answer has been interposed "
That case was followed by this court in Cody v. Bank, 63 App. Div. 199, 71 N. Y. Supp. 277; and, in view of the very full discussion there of the exact question here presented for consideration, it is unnecessary to add to what was therein said.
Regarding the question as settled, therefore, so far as this court is concerned, we think that the disposition made by the special term in sustaining the demurrer was right. The interlocutory judgment appealed from should accordingly be affirmed, with costs, with leave to plaintiff within 20 days to amend complaint upon payment of costs in this court and in the court below. All concur, except LAUGHLIN, J., who dissents.