Case Name: The Merchants' Credit Clearing House Association, Respondent, M. Frank Dennis, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-02-24
Citations: 143 A.D. 170
Docket Number: 
Parties: The Merchants’ Credit Clearing House Association, Respondent, M. Frank Dennis, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 143
Pages: 170–172

Head Matter:
The Merchants’ Credit Clearing House Association, Respondent, M. Frank Dennis, Appellant.
Second Department,
February 24, 1911.
Judgment—presumption' — merits — stay — failure to pay costs of former suit — when motion denied.
The presumption is that a judgment dismissing a complaint is not upon the merits unless it be specifically so stated.
Where the complaint in a suit in equity brought by a corporation against its president, director and general manager for misfeasance in office, which demands an accounting, damages and other relief, is dismissed without considering the merits, and the plaintiff commences an action at law against the same defendant to recover damages for the same alleged wrongful acts, setting them forth substantially as in the complaint in the former suit, amotion by the defendant for an order staying further proceedings until payment of the costs of the former suit will be denied in the absence of evidence that plaintiff, which is alleged to have been divested of all its property by defendant, is vexatiously pursuing him with unnecessary litigation.
Appeal by the defendant, M. Frank Dennis, from an order of . the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Richmond on the 29th day of September, 1910, denying a motion to stay further proceedings in this action until the payment of costs in a former action between the parties, and also from an order entered on the 17th day of October, 1910, resettling the first order.
James S. Darcy [Edward D. Loughman with him on the brief], for the appellant.
Charles Trosk, for the respondent.

Opinion:
Rich, J.:
The learned justice at Special Term followed the ruling of this court in Skeels v. Bodine (68 App. Div. 217), and was clearly right. The first action herein was brought in equity against the defendant as president, director and general manager of the plaintiff company, for misfeasance in office, and the relief sought was, first, an accounting; second, damages; third, a return to plaintiff of all its assets, books, furniture, securities and other property in his possession; and, fourth, for such other relief as was proper. This action is at law to recover damages for defendant's alleged wrongful acts, which are alleged substantially the same as in the former action. The parties do not agree as to the ground upon which the court dismissed the complaint in the first action, the plaintiff contending that it was because defendant demanded a jury' trial as matter of right, and defendant that it was because the action was brought under the provisions of former Code section 1781, and that plaintiff was not one of the persons authorized by section 1782 to bring or maintain the action. The fact is not disputed, however, that the action was not disposed of upon the merits.
While it is true that in the Sheets case the complaint was dismissed without prejudice to an action at law on the written contract, whereas in the case at bar leave to sue over was not expressly given, the effect of such an omission was considered in Maass v. Rosenthal (62 Misc. Rep. 350; affd., 132 App. Div. 902), and it was held that the rights of the parties were, nevertheless, the same as in the Skeels case. The words " without prejudice to an action at law " in such a case are necessarily implied, for the reason that the presumption always is that a judgment dismissing a complaint is not upon the merits unless.it is specifically so stated.
There is nothing in the record tending to show that the plaintiff is vexatiously pursuing the defendant with unnecessary litigation. Plaintiff's legal rights have not as yet been considered upon the merits, and it has the right to have them so considered. The complaint and affidavit submitted in opposition to the motion aver that the defendant by his wrongful acts has divested plaintiff of all of its property, and reduced it to a situation where it is wholly without funds because of which it is impossible to pay the costs of the former action. Upon this showing we see no reason to interfere with the discretion of the Special Term.
The order must be affirmed, with ten dollars costs and disbursements.
Jenks, P. J., Burr, Thomas and Carr, JJ., concurred.
Order affirmed, with ten dollars costs and disbursements.