Court Opinion

ID: 6132238
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:17:53.896506+00
Date Added: 2024-06-11T08:53:43.541091
License: Public Domain

Daniels, J.:
The appointment of the plaintiff as receiver was legally proved by the order made for that purpose, and the bond given and filed by him entitling him to act in that capacity. (Potter v. Merchants' Bank, etc., 28 N. Y., 641; Whittlesey v. Frantz, 74 id., 456.) He claimed to recover from the defendants ’the amount received by them by way of subscriptions to the capital stock of the Rockaway Jockey Club,' limited, a corporation formed and existing under chapter 611 of the Laws of 1875. By section 4 of this act the secretary of state was empowered to issue a license to the persons making the certificate of incorpoi’ation, empowering them as commissioners to open books for subscriptions to the capital stock of the corporation. But they were prohibited by section 5 of the same act from taking subscriptions, unless the person or persons making them at the same time paid to them ten per cent in cash of the par value of the stock for which he or they subscribed. This license was issued by the secretary of state to the commissioners, and they acted under it and received subscriptions for the capital stock of the company, upon which' they were paid the requisite ten per cent mentioned in the statute. There was subscribed for in this manner 1,525 shares of the capital stock of the corporation, which by section 11 of the act could not be issued for a less sum than twenty-five dollars nor more than $100 for each share. The' shares were in fact made for the sum of $100 each, and ten per cent upon this number of shares of the par value of $100 each was in this manner shown to have been received by the defendants as such commissioners.
*482At tbe close of tbe evidence proving these facts an application was made for tbe dismissal of tbe complaint, and a direction to that effect was given by tbe court. Tbis direction seems to have proceeded upon tbe conclusion that tbe plaintiff could not recover in tbe action without making proof of tbe defendants’ failure to pay over to the corporation tbe money which bad been received by them as commissioners.
Tbe complaint alleged that they bad failed to pay over tbe money, and then added as a further allegation that tbe defendants bad refused to pay it over and bad converted it to their own use. But no claim was made at tbe trial to maintain the action against them upon these latter grounds, or because of any positive misconduct in tbe disposition of tbe money on their part. Tbe plaintiff relied for bis right to recover in the action wholly upon the facts that the defendants, as commissioners under tbis act, bad received tbis sum of money which they were undoubtedly liable to pay to tbe corporation or tbe receiver, who bad succeeded to all its rights of action. The case as tbe proof presented it, and it was all admissible under tbe complaint, was merely one for money bad and received by tbe commissioners to the use of tbe corporation, and to maintain it all that tbe law required was that it should be proved that tbis sum of money bad passed into their possession for tbe use and benefit of tbe corporation, and that was clearly proven by tbe evidence given upon tbe trial. If they bad paid over the money, or otherwise disposed of it under the authority of the corporation, that was a matter of fact for them to establish. The proof of the fact was admissible in their behalf so far as they bad alleged that payment had been made. It was an affirmative fact resting upon them, tbe proof of which, if it existed, must have been peculiarly within their power, and under tbe rules of pleading tbe plaintiff was not bound to anticipate its effect by first making proof that tbe money bad not been paid or properly accounted for. A complete cause of action to tbis effect was included within tbe allegations of tbe complaint and tbe proof given upon tbe trial, and neither was weakened by tbe further and needless allegation that tbe defendants bad converted tbe money to their own use and bad refused to pay it over. |These allegations, as tbe complaint was framed, were needless and secured no advantage either to the plaintiff or tbe defendants in tbe *483.general form wbicb bad been given to tbe action. It is only where the charge made in the complaint is one of criminal neglect of duty, or of fraud, or of the wrongful violation of the rights of the plaintiff, or the party represented, that negative proof has been required to be given. (People v. Pease, 27 N. Y., 45, 74.) No such charge formed the foundation to the plaintiff’s right to recover in this •action. It was dependent upon the fact of the defendants having received the money and omitting to pay it over; and to sustain the right of the plaintiff to recover it was not requisite that this negative should first be proved to have been properly charged as a part •of the complaint. But it was for the defendants, if they had relieved themselves of liability for the money after it passed into their hands, to mate proof of that fact by way of establishing .their own defense. (Everett v. Lockwood, 8 Hun, 356; Tugman v. National Steamship Co., 76 N. Y., 207, 210, 211; Segelken v. Meyer, 94 id., 473, 484.)
The direction for the dismissal of the complaint should not under the circumstances appearing upon the trial have been given, and the judgment should be reversed and a new trial ordered, with costs -to abide the event.
Davis, P. J., and Beady, J., concurred.
Judgment reversed, new trial ordered, costs to abide event.