Court Opinion

ID: 6131264
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:08:47.136281+00
Date Added: 2024-06-11T08:53:23.186709
License: Public Domain

Brady, J.:
The complaint in this case was dismissed solely upon the ground that there was a defect in the plaintiff’s title; that he had paid nothing for his stock and that he was not a real and bona fide litigant. And this view rests upon the conceded fact that the plaintiff took his stock for the purpose of joining in this'action, and for the purpose of aiding other plaintiffs, should the circumstance of their being non-residents of the -State require it.
It appears that the plaintiff Giffin is a resident of the State, and that on the day this action was commenced, namely, May 8, 1880, he was a clerk in the employment of Day & Heaton, stock brokers in this city. It was suggested by Weaver, one of the plaintiffs, that Giffin should become a stockholder of the Oregon Steam Navigation Company for the purpose of joining as plaintiff herein, and he became a stockholder of ten shares in the following manner: Six hundred dollars was deposited by Weaver with Day & Heaton to Giffin’s credit on the day .named, and Giffin forthwith drew a check on Day & Heaton for $600 to the order of Weaver, who thereupon handed Giffin a certificate of ten shares of the stock indorsed in blank. Before this incident Giffin was a stranger to both defendant companies, and, therefore, had no wrong to redress and no injury of which to complain, and had sustained no damage from the company.
It also appeared that Giffin never essayed to transfer the certificate for the shares, which still stand in the name of Webster, who is not a pai’ty to the suit.
*546The learned judge in the court below said: “ The man who sellathe stock gives to this plaintiff the money with which it was purchased. It brings him into the condition of being a mere nominal plaintiff and a volunteer, for the purpose of invoking the aid of this court to enforce really an imaginary right, and to redress some wrong which he really has not personally sustained.”
In a former review of some of the questions in this case, the-report of which will be found in 28 Hun, 269, it was substantially held that this action might be maintained at the instance of a resident plaintiff; and it was declared in that case that there was-no doubt that a claim against a foreign corporation by a non-resident could be assigned to a resident of this State for the purpose of enabling him to sue, and thus to avoid the disability which would otherwise exist. And this principle has been reasserted .in cases subsequent to those cited as justifying that conclusion in the opinion delivered.
In the case of Sheridan v. The Mayor (68 N. Y., 30), the court held that the plaintiff was the real party in interest under the Code, if he had a valid transfer, as against the assignor, and held the legal title to the demand; and further, that the defendant had no legal interest to inquire further. And this was founded upon the proposition that a payment to or recovery by the assignee occupying this position was a protection to the defendant against any claim that might be made by the assignor; and that an inquiry as to the bona fides of the transfer might become material if the rights of creditors were involved, or upon the right of interposing some defense or counter-claim against the assignor. And in the case of Morris v. Tuthill (72 N. Y., 575), it was held that the facts that the assignor of a mortgage and his assignee acted in concert, with a view unnecessarily to harass and oppress the mortgagor and with intent to prevent payment, to the end that the equity of redemption might be foreclosed and they become purchasers for less than its-value, did not constitute a defense to an action to foreclose the mortgage; nor did the fact that the assignee took title from motives of malice, and. solely with a view of bringing an action, and that the assignor from the like motive transferred without consideration, furnish any defense, and it did not impeach plaintiffs’ title. (See, also, Stone v. Frost, 61 N. Y., 614; Allen v. *547Brown, 44 id., 228.) The English Courts of Chancery appear to have established the rule that the owner of stock may maintain a bill and obtain an injunction, although he buy his stock to enable him to file the bill, and at the solicitation of holders of the same kind of stock; "provided, however, that he shall not be acting in the interest of a rival to the defendant corporation, or be indemnified so 'that* he incurs no risk or responsibility in bringing the suit. (Bloxam v. Metropolitan Railway Co., L. R., 3 Ch. App., 337, 343, 353; Seaton v. Grant, L. R., 2 Ch. App., 459; Filder v. London, B. and S. C. Ry. Co., 1 Hemming & Miller, 493; Forrest v. Manchester Ry. Co., 4 De Gex, F. & G., 126.)
For these reasons it is thought that the learned justice in the court below erred in dismissing the complaint upon the ground stated, and that the resident plaintiff, being rectus 'in curia, has a cause of action entitled to consideration.
The judgment should therefore be reversed and a new trial ordered, with costs to abide the event.
Daniels, J., concurred.