Case Name: The Mutual Bank, Appellant, v. William S. Burrell, Respondent
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1899-10
Citations: 29 Misc. 322
Docket Number: 
Parties: The Mutual Bank, Appellant, v. William S. Burrell, Respondent.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 29
Pages: 322–323

Head Matter:
The Mutual Bank, Appellant, v. William S. Burrell, Respondent.
(Supreme Court, Appellate Term,
October, 1899.)
Payment — Abatement.
Where a bank, holding an assignment of the dues of a membership corporation as collateral security for the payment of a note discounted for such corporation, has been paid the note, it has no right subsequently to begin an action against a member of the corporation based upon the dues assigned; and therefore a receiver of the corporation, subsequently appointed, will not be permitted to invoke sections 755 and 756 of the Code of Civil Procedure in order to continue the action, as the bank had no right to commence it.
Appeal by the plaintiff from a judgment in favor of the defendant, rendered in the Municipal Court, third district, borough of Manhattan.
Charles Be Hart Brower, for appellant.
Lewis & Stoddard, for respondent.

Opinion:
Ereedman, P. J.
This action was brought by the plaintiff upon an assigned claim for dues alleged to be due and owing by the defendant to a membership corporation of the city of New York called the " Military Club."
The facts are substantially undisputed. It appears that upon July 1, 1898, there was due from the defendant, by reason of his membership in said club, and according to the by-laws thereof, the sum of $20 for six months' dues, payable in advance. On August 8, 1898, the club, by its president, secretary and treasurer and under the seal of the corporation, executed an assignment to the plaintiff herein of the dues then owing hy a large number of its members, the defendant among others. Upon the same day the plaintiff discounted two promissory notes made by the club for the sum of $1,500 and $2,500 respectively, and, as further security, took personal checks from several responsible members of the Military Club, aggregating the sum of $4,000.
It is conceded that the assignment of the dues mentioned was made as collateral security, but a question has been raised as to whether it was made and taken as collateral security for the payment of both notes or for the payment of the $1,500 only. The testimony of the cashier of the plaintiff was, in the first instance, that the assignment was made and taken as collateral security for the payment of one of the notes, but later on he testified he was not sure but what it might have been taken on account of both notes in connection with the personal checks of several members.
But there was further evidence on the point. On ISTovember 2, 1898, Avery D. Andrews was appointed receiver of said club, and from a certain petition, verified March 16, 1899, made by him for the purpose of obtaining an order at the Special Term of the Supreme Court allowing him, as receiver, to continue this and other actions in the name of the plaintiff, it was made to appear that the assignment of the claim for dues of members was made as collateral security for the payment of the $1,500 note above mentioned. Upon this evidence the judge below had a right to find that the said assignment constituted collateral security only for the payment of the $1,500 note. That being so, and it further appearing beyond dispute that the $1,500 note was paid to the plaintiff on October 6, 1898, and that the action was not commenced until October 10, 1898, the plaintiff at the time of the commencement of the action had no longer any cause of action against the defendant. This effectually disposes of the case.
Moreover, even the $2,500 note was paid to the plaintiff on October 23, 1898, and thereupon the checks taken from members as collateral security were returned to them by the plaintiff.
But the effect to be given to these additional facts need not be considered here. Sections 755 and 756 of the Code of Civil Procedure cannot be invoked by the receiver for the purpose of enabling him to continue an action in the name of a plaintiff who had no right to commence it.
MacLeah and Lgvextritt, JJ., concur.
Judgment affirmed, with costs.