Court Opinion

ID: 5475145
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:50:11.804486+00
Date Added: 2024-06-11T08:33:27.980788
License: Public Domain

Ingraham, P. J.
Upon the trial of this cause, the complaint was dismissed by the referee upon the ground that the complaint did not state a cause of action.
The supposed defect was, that the defendant was one of the associates, and could not, therefore, be sued, because he was to be considered as holding the position of a partner, and could not be sued for a liability to the association.
By the third article of the association, it is provided that the board of directors may prosecute and recover, in an action at law, any and every installment upon the share, and also any and every assessment. This was an agreement that partners might make even in a common partnership, and when made would estop a partner from taking the objection which was made to this action.
The statute of 1849, provides that all suits for joint stock associations may be brought in the name of the president, and shall have the same effect as if brought in the name of all the associates. With the statutory provisions made in regard to these associations, it can scarcely be proper now to consider them as mere partnerships possessing all the rights and subject to the liabilities of partners. On the contrary, so many corporate powers are conferred by the various statutes relating thereto, that it might rather be said, that except*509ing in the liability for the indebtedness of the association they possessed corporate powers. In the case of Waterbury v. The Merchant's Union Express Co. (50 Barbour’s Rep., 160), this subject was fully examined in the Special Term, and the various corporate powers possessed by them are enumerated, and it was held that in controversies between a shareholder and the association, courts must follow the analogies afforded by the laws applicable to corporations rather than those applicable to partners. It could not have been the intent of the legislature, after conferring so many corporate powers on these associations to leave them in a position, in which, whenever any associate had a claim against the association, or was indebted thereto, that resort must be had for its collection to a proceeding to dissolve the association, in the same manner as a common partnership.
On the contrary, I am of the opinion that under the articles of association, and the statute, an action may be maintained against an associate to recover an indebtedness due from him on his stock, as for an assessment.
The reasons are very fully stated in Waterbury v. The Express Co., above cited, and need not be repeated here.
The judgment should be reversed and a new trial ordered, costs to abide the event.